Alcohol excess is associated with a spectrum of disease ranging from simple steatosis through steatohepatitis to cirrhosis and, in some, hepatocellular carcinoma. Alcoholic steatohepatitis itself has a variable histological picture, but a constant feature is the presence of ballooning degeneration of hepatocytes. Recent studies have emphasized the importance of apoptosis as a mechanism of cell death in this condition. It is accompanied by varying degrees of perivenular, centrilobular, and pericellular fibrosis. When severe and associated with perivenular liver cell necrosis (central sclerosing hyaline necrosis), there may be precirrhotic portal hypertension. The pattern of fibrosis may initially be diffuse with little nodule formation, but in time there is frequently the development of a micronodular cirrhosis. In approximately 15% of patients with established cirrhosis, hepatocellular carcinoma develops; several precursor lesions are now recognized which can be detected histologically. Several authors have drawn attention to additional components of the spectrum of alcoholic liver disease, including vascular changes, portal tract inflammation and fibrosis, ductular reaction, and iron overload. The morphology of alcoholic liver disease can be significantly affected by abstinence; furthermore, the clinical and morphological phenotype can be significantly influenced by the presence of comorbid conditions such as nonalcoholic fatty liver disease or viral hepatitis. Biopsy appearances can provide important prognostic information in alcoholic liver disease, and this review incorporates a proposed grading and staging schema for assessment of histological severity.