We investigated the potential of dietary saturated fatty acids to decrease endotoxemia and suppress expression of cyclooxygenase 2 (Cox-2) and tumor necrosis factor alpha (TNF-alpha) in established alcohol-induced liver injury. Six groups (five rats/group) of male Wistar rats were studied. Rats in group 1 were fed a fish oil-ethanol diet for 6 weeks. Rats in groups 2, 3, and 4 were fed fish oil and ethanol for 6 weeks. Ethanol administration was stopped at this time, and the rats were switched to isocaloric diets containing dextrose with fish oil (group 2), palm oil (group 3), or medium-chain triglycerides (group 4) as the source of fat for an additional 2 weeks. Rats in groups 5 and 6 were fed fish oil-ethanol and fish oil-dextrose, respectively, for 8 weeks. Liver samples were analyzed for histopathology, lipid peroxidation, and levels of messenger RNA (mRNA) for Cox-2 and TNF-alpha. Concentrations of endotoxin were determined in plasma. The most severe inflammation and fibrosis were detected in groups 1 and 5, as were the highest levels of endotoxin, lipid peroxidation, and mRNA for Cox-2 and TNF-alpha. After ethanol was discontinued, there was minimal histological improvement in group 2 but near normalization of the histology, including regression of fibrosis, in groups 3 and 4. Histological improvement was associated with decreased levels of endotoxin, lipid peroxidation, and reduced expression of Cox-2 and TNF-alpha. The data indicate that a diet enriched in saturated fatty acids (groups 3 and 4) effectively reverses alcohol-induced liver injury, including fibrosis. The therapeutic effects of saturated fatty acids may be explained, at least in part, by reduced endotoxemia and lipid peroxidation, which in turn result in decreased levels of TNF-alpha and Cox-2.