Proper function of the peroxisome proliferator-activated receptor ␣ (PPAR␣) is essential for the regulation of hepatic fatty acid metabolism. Fatty acid levels are increased in liver during the metabolism of ethanol and should activate PPAR␣. However, recent in vitro data showed that ethanol metabolism inhibited the function of PPAR␣. We now report that ethanol feeding impairs fatty acid catabolism in the liver in part via blocking PPAR␣-mediated responses in C57BL/6J mice. Ethanol feeding decreased PPAR␣/retinoid X receptor ␣ binding in electrophoretic mobility shift assay of liver nuclear extracts. mRNAs for PPAR-regulated genes were reduced (long chain and medium chain acyl-CoA dehydrogenases) or failed to be induced (acyl-CoA oxidase, liver carnitine palmitoyl-CoA transferase, very long chain acyl-CoA synthetase, very long chain acyl-CoA dehydrogenase) in livers of the ethanol-fed animals, and ethanol feeding did not increase the rate of fatty acid -oxidation. Wy14,643, a PPAR␣ agonist, restored the DNA binding activity of PPAR␣/retinoid X receptor ␣, induced mRNA levels of PPAR␣ target genes, stimulated the rate of fatty acid -oxidation, and prevented fatty liver in ethanol-fed animals. Impairment of PPAR␣ function during ethanol consumption contributes to the development of alcoholic fatty liver, which can be overcome by Wy14,643.