Peroxisome proliferator-activated receptor α (PPARα), a fatty acid oxidation regulator, inhibits alcohol-induced fatty liver (AFL). PPARα agonist WY-14,643 ameliorates AFL. Nicotine enhances AFL. In this study, we investigated whether PPARα activation also blocks nicotine-enhanced AFL. Mice were fed liquid diets containing ethanol in the presence or absence of nicotine, WY-14,643 was added to the above diets at 10 mg/L. The results showed that WY-14,643 blunted AFL and nicotine-enhanced AFL, which was paralleled with striking induction of PPARα target genes. However, serum ALT was dramatically increased by the ethanol/WY-14,643 feeding and was further increased by nicotine/ethanol/WY-14,643 feeding, which was confirmed by necro-inflammation and elevated oxidative stress. Interestingly, serum alcohol levels were dramatically decreased by WY-14,643. Ethanol is mainly metabolized by alcohol dehydrogenase (ADH), cytochrome P450 2E1 (CYP2E1) and catalase. ADH and CYP2E1 were not increased by WY-14,643, but catalase was induced. What is more, injection of catalase inhibitor increased serum ethanol. Decreased serum alcohol, attenuated fatty liver, and enhanced liver injury were not induced by WY-14,643 in mice lacking PPARα. In conclusion, PPARα activation by WY-14,643 attenuates alcohol/nicotine-induced fatty liver but deteriorates ethanol/nicotine-induced liver injury; WY-14,643 enhances ethanol metabolism via induction of catalase.