Alcoholic liver disease is one of the most prevalent liver diseases worldwide, and a major cause of morbidity and mortality. Alcoholic hepatitis is a severe form of liver injury in patients with alcohol abuse, can present as an acute on chronic liver failure associated with a rapid decline in liver synthetic function, and consequent increase in mortality. Despite therapy, about 30%–50% of patients with severe alcoholic hepatitis eventually die. The pathogenic pathways that lead to the development of alcoholic hepatitis are complex and involve oxidative stress, gut dysbiosis, and dysregulation of the innate and adaptive immune system with injury to the parenchymal cells and activation of hepatic stellate cells. As accepted treatment approaches are currently limited, a better understanding of the pathophysiology would be required to generate new approaches that improve outcomes. This review focuses on recent advances in the diagnosis, pathogenesis of alcoholic hepatitis and novel treatment strategies.