Several recent genome-wide association studies (GWAS) have identified single nucleotide polymorphism (SNPs) near the gene encoding membrane-bound O -acyltransferase 7 ( MBOAT7 ) that is associated with advanced liver diseases. In fact, a common MBOAT7 variant (rs641738), which is associated with reduced MBOAT7 expression, confers increased susceptibility to non-alcoholic fatty liver disease (NAFLD), alcohol-associated liver disease (ALD), and liver fibrosis in those chronically infected with hepatitis viruses B and C. The MBOAT7 gene encodes a lysophosphatidylinositol (LPI) acyltransferase enzyme that produces the most abundant form of phosphatidylinositol 38:4 (PI 18:0/20:4). Although these recent genetic studies clearly implicate MBOAT7 function in liver disease progression, the mechanism(s) by which MBOAT7-driven LPI acylation regulates liver disease is currently unknown. Previously we showed that antisense oligonucleotide (ASO)-mediated knockdown of Mboat7 promoted non-alcoholic fatty liver disease (NAFLD) in mice (Helsley et al., 2019). Here, we provide mechanistic insights into how MBOAT7 loss of function promotes alcohol-associated liver disease (ALD). In agreement with GWAS studies, we find that circulating levels of metabolic product of MBOAT7 (PI 38:4) are significantly reduced in heavy drinkers compared to age-matched healthy controls. Hepatocyte specific genetic deletion ( Mboat7 HSKO ), but not myeloid-specific deletion ( Mboat7 MSKO ), of Mboat7 in mice results in enhanced ethanol-induced hepatic steatosis and high concentrations of plasma alanine aminotransferase (ALT). Given MBOAT7 is a lipid metabolic enzyme, we performed comprehensive lipidomic profiling of the liver and identified a striking reorganization of the hepatic lipidome upon ethanol feeding in Mboat7 HSKO mice. Specifically, we observed large increases in the levels of endosomal/lysosomal lipids including bis(monoacylglycero)phosphates (BMP) and phosphatidylglycerols (PGs) in ethanol-exposed Mboat7 HSKO mice. In parallel, ethanol-fed Mboat7 HSKO mice exhibited marked dysregulation of autophagic flux and lysosomal biogenesis when exposed to ethanol. This was associated with impaired transcription factor EB (TFEB)-mediated lysosomal biogenesis and accumulation of autophagosomes. Collectively, this works provides new molecular insights into how genetic variation in MBOAT7 impacts ALD progression in humans and mice. This work is the first to causally link MBOAT7 loss of function in hepatocytes, but not myeloid cells, to ethanol-induced liver injury via dysregulation of lysosomal biogenesis and autophagic flux.