Ethanol-induced hepatic lipophagy plays an important cytoprotective role against liver injury, but its mechanism is not fully determined. In the present study, ethanol-induced lipophagy was studied in an immortalized mouse hepatocyte line, AML12. We found that ethanol treatment elevated lipid content in these cells, which could be regulated by autophagy. To determine the potential mechanism, we investigated the role of a key adaptor molecule SQSTM1/p62. SQSTM1 can bind to LC3 on autophagosomes and ubiquitinated molecules on cargos, thus facilitating the autophagic engulfment of the cargo. We found that both LC3 and SQSTM1 could colocalize with lipid droplets (LDs) following ethanol treatment. Colocalization of LC3 with LDs was significantly inhibited by SQSTM1 knockdown, which also reduced ethanol-induced lipid elevation. In addition, increased ubiquitin signals were found to colocalize with SQSTM1 on LDs in response to ethanol. Moreover, the SQSTM1 signal was colocalized with that of perilipin1, a major protein on LDs. Finally, perilipin1 knockdown significantly altered ethanol-induced lipophagy. Taken together, these data support a model in which autophagosomes were directed to the LDs via SQSTM1, which bound to ubiquitinated proteins, possibly including perilipin 1, on LDs. This study provides a potential mechanistic explanation to how ethanol induces lipophagy in hepatocytes.