Sestrins (Sesns) are a family of stress-sensitive genes that have been suggested to regulate lipid metabolism. Chronic ethanol feeding is known to cause lipid accumulation in hepatocytes. This study was designed to investigate the role of Sesn3 in the pathogenesis of alcohol-induced hepatic steatosis. We demonstrated that ethanol inhibited the expression of Sesn3 in VL-17A cells. Over-expression of Sesn3 ameliorated TG accumulation; down-regulation using shRNA significantly deteriorated TG accumulation in these cells. The expression of Sesn3 was also reduced in mice fed with ethanol for 4 weeks. Overexpression of Sesn3 prevented hepatic steatosis whereas knockdown of Sesn3 worsened hepatic steatosis in ethanol-fed mice. Overexpression of Sesn3 significantly reduced the expression of genes encoding for lipid synthesis through AMPK pathway. Overexpression of Sesn3 augmented the effect of ethanol on phopspho-p70 S6 kinase. The levels of hepatic LC3-a marker for autophagy-- expression were significantly decreased in ethanol-fed mice after Sesn3 gene was knocked down. Our findings suggest that inhibitory effect of ethanol on Sesn3 may play an important role in the development of ethanol-induced fatty liver.