We have created a number of recombinant Hep G2 cell lines, designated VA cells, that constitutively express alcohol dehydrogenase. Oxidation of ethanol by the VA cells results in the production and accumulation of acetaldehyde, and a dramatic increase in the nicotinamide adenine dinucleotide, reduced (NADH)/nicotinamide adenine dinucleotide (NAD+) ratio (redox-state). It is believed that production of acetaldehyde, and the increase in the redox-state of hepatocytes, are responsible for many of the dysfunctions associated with alcoholic liver disease. When the VA cells were cultured in the presence of ethanol, we observed a dramatic reduction in cell accumulation. This reduction was more pronounced in cells that metabolized ethanol more efficiently. Inhibition of alcohol dehydrogenase activity abolished this reduction, demonstrating that ethanol oxidation was required for this dysfunction. Subsequent investigations indicated that this ethanol oxidation–mediated reduction in cell accumulation was the result of both cytotoxicity and impaired DNA synthesis. To dissociate the increase in the cellular redox-state from acetaldehyde production, VA cells were cultured in the presence of isopropanol. The oxidation of isopropanol results in similar redox changes, but the metabolic by-product of isopropanol oxidation is acetone. The metabolism of isopropanol by VA cells resulted in very little reduction in cell number. Furthermore, treatment of ethanol-metabolizing VA cells with the aldehyde dehydrogenase inhibitor, cyanamide, increased the levels of acetaldehyde and resulted in an additional reduction in cell number. In conclusion, these studies indicated that exposure to acetaldehyde caused cytotoxicity, as well as the ethanol oxidation–mediated reduction in cell number.