Alcoholic steatohepatitis (ASH) is the progressive form of alcoholic liver disease and is considered as a high risk factor for the development of type 2 diabetes (T2D); however, the underlying mechanisms and target molecules remain obscure. Here, we found that chronic ethanol feeding, revealed severe hepatic steatosis, accompanying with the increase of impaired glucose tolerance and insulin resistance. The levels of free fatty acid and ceramide were increased in ethanol-fed mice, along with the increase of ER stress-mediated ATF3 induction. The ER stress-mediated lipogenesis and ATF3 induction observed in ethanol-fed mice were markedly attenuated by the injection of tauroursodeoxycholate (TUDCA), a chemical chaperone of ER stress. Additionally, administration of TUDCA prevented the increased expression of CD36/FAT, fatty acid transporter, and caveolin-1, a scaffolding protein of caveolae, in the liver of ethanol-fed mice, accompanying with the reduction of hepatic FFA and ceramide. Similarly, we observed that in human patients with AFLD, ATF3 expression positively correlates with the increase of ER stress-mediated lipogenesis and inflammatory responses. Moreover, the incidence of T2DM was higher in patients with AFLD than healthy subjects without AFLD. Hepatic expression of ATF3 was upregulated in both ethanol-fed mice and patients with AFLD; this upregulation seems to play a critical role, contributing to the alcohol-induced hepatic liver injury. Collectively, we demonstrated that chronic ethanol feeding in the mouse system induces alcoholic hepatic steatosis, exhibiting common histological and molecular features observed in the patients with AFLD.