Reactive oxygen species contribute to steatosis and inflammation in alcoholic liver disease (ALD). Here, we evaluated the selective contribution of p47phox, a critical subunit of nicotinamide adenine dinucleotide phosphate oxidase (NADPH) oxidase complex, in liver parenchymal cells and in bone marrow (BM)-derived cells. Female C57Bl/6 wild type [WT], total body p47phox-deficient knockout [KO] or p47phox chimera mice generated by BM transplantation of p47phox-KO-BM into irradiated WT mice (WT/p47phox-KO-BM mice) received 5% Lieber-DeCarli alcohol or control (pair feeding) diet for 4 weeks. Alcohol-induced liver steatosis as measured by Oil Red O staining and serum triglyceride up-regulation were prevented in p47phox-KO mice but not in WT/p47phox-KO-BM chimeras compared to WT controls. Serum alanine aminotransferase (ALT) was significantly increased in alcohol-fed WT mice but not in p47phox-KO mice compared to pair-fed controls. There was no protection from alcohol-induced increase in ALT and liver damage in the WT/p47phox-KO-BM mice. Alcohol-induced liver steatosis was accompanied by up-regulation of the lipid droplet-stabilizing protein, adipocyte differentiation-related protein (ADRP), and the fatty acid synthesis-associated genes, fatty acid synthase (FASN) and acetyl-CoA carboxylase (ACACA). Total body deficiency in p47phox but not selective absence of p47phox in BM-derived cells prevented alcohol-induced up-regulation of ADRP, FASN, and ACACA in the liver. Finally, alcohol-induced activation and DNA binding of nuclear factor κB (NF-κB), a master regulator of inflammation, were significantly increased after alcohol feeding in WT but not in p47phox-KO mice. Selective deficiency of p47phox in BM-derived cells (WT/p47phox-KO-BM chimera) failed to prevent NF-κB induction after alcohol feeding. Total body deficiency in p47phox subunit of NADPH oxidase complex protects mice from alcohol-induced liver steatosis via mechanisms involving ADRP, FASN, and ACACA as well as from alcohol-induced NF-κB activation. In contrast, selective absence of p47phox in BM-derived cells fails to provide protection via these mechanisms. These results suggest that p47phox in parenchymal cells plays a critical role in the pathogenesis of ALD.