Alcoholic fatty liver disease (AFLD) is one of the most prevalent forms of liver disease worldwide and can progress to inflammation (hepatitis), fibrosis/cirrhosis, and ultimately lead to end stage liver injury. The mechanisms, by which ethanol consumption leads to AFLD, are complicated and multiple, and remain incompletely understood. Nevertheless, understanding its pathogenesis will facilitate the development of effective pharmacological or nutritional therapies for treating human AFLD. Chronic ethanol consumption causes steatosis and inflammation in rodents or humans by disturbing several important hepatic transcriptional regulators, including AMP-activated kinase (AMPK), lipin-1, sterol regulatory element binding protein 1 (SREBP-1), PPARγ co-activator-1α (PGC-1α), and nuclear transcription factor-κB (NF-κB). Remarkably, the effects of ethanol on these regulators are mediated in whole or in part by inhibition of a central signaling molecule, sirtuin 1 (SIRT1), which is a nicotinamide adenine dinucleotide (NAD+, NADH)-dependent class Ⅲ protein deacetylase. In recent years, SIRT1 has emerged as a pivotal molecule controlling the pathways of hepatic lipid metabolism, inflammatory responses and in the development of AFLD in rodents and in humans. Ethanol-mediated SIRT1 inhibition suppresses or stimulates the activities of above described transcriptional regulators and co-regulators, thereby deregulating diverse lipid metabolism and inflammatory response pathways including lipogenesis, fatty acid β-oxidation, lipoprotein uptake and secretion and expression of pro-inflammatory cytokines in the liver. This review aims to highlight our current understanding of SIRT1 regulatory mechanisms and its response to ethanol-induced toxicity, thus, affirming significant role of SIRT1 signaling in the development of AFLD.