Fibroblast growth factor 21 (FGF21) is a hepatokine that regulates glucose and lipid metabolism in the liver. We sought to determine the role of FGF21 in hepatic steatosis in mice exposed to chronic alcohol treatment and to discern underlying mechanisms. Male FGF21 knockout (FGF21 KO) and control (WT) mice were divided into groups that were fed either the Lieber DeCarli diet containing 5% alcohol or an isocaloric (control) diet for 4 weeks. One group of WT mice exposed to alcohol received recombinant human FGF21 (rhFGF21) in the last 5 days. Liver steatosis and inflammation were assessed. Primary mouse hepatocytes and AML-12 cells were incubated with metformin or rhFGF21. Hepatic genes and the products involved in in situ lipogenesis and fatty acid β-oxidation were analyzed. Alcohol exposure increased circulating levels and hepatic expression of FGF21. FGF21 depletion exacerbated alcohol-induced hepatic steatosis and liver injury, which was associated with increased activation of genes involved in lipogenesis mediated by SREBP1c and decreased expression of genes involved in fatty acid β-oxidation mediated by PGC1α. rhFGF21 administration reduced alcohol-induced hepatic steatosis and inflammation in WT mice. These results reveal that alcohol-induced FGF21 expression is a hepatic adaptive response to lipid dysregulation. Targeting FGF21 signaling could be a novel treatment approach for alcoholic steatohepatitis.