Acetaldehyde, the toxic product of ethanol metabolism in the liver, covalently binds to a variety of proteins, thereby altering liver function and structure. Through its binding to tubulin, acetaldehyde decreases the polymerization of microtubules thereby impairing protein secretion and favouring their retention, with associated swelling of hepatocytes. Acetaldehyde adduct formation also impairs some enzyme activities. Either directly or through binding with GSH, acetaldehyde favours lipid peroxidation. Various mitochondrial functions are altered, particularly after chronic ethanol consumption which sensitizes the mitochondria to the toxic effects of acetaldehyde. In cultured myofibroblasts, acetaldehyde stimulates collagen production. The acetaldehyde-protein adducts stimulate the production of antibodies directed against the acetaldehyde epitope. This immune response may contribute to the aggravation or perpetuation of alcohol-induced liver damage. Some acetaldehyde effects, however, could conceivably be considered as beneficial, such as the stimulation of vascular prostacyclin release which may take part in the 'protective' effect of moderate ethanol consumption against some cardiovascular complications.