Alcoholic fatty liver disease (AFLD) is a growing health problem for which no targeted therapy is available. We set out to study whether systemic inactivation of the main hypoxia-inducible factor prolyl 4-hydroxylase, HIF-P4H-2 (PHD2/EglN1), whose inactivation has been associated with protection against metabolic dysfunction, could ameliorate it. HIF-P4H-2-deficient and wild-type (WT) mice or HIF-P4H inhibitor-treated WT mice were subjected to an ethanol diet for 3-4 weeks and their metabolic health, liver and white adipose tissue (WAT) were analyzed. Primary hepatocytes from the mice were used to study cellular ethanol metabolism. The HIF-P4H-2-deficient mice retained a healthier metabolic profile, including less adiposity, better lipoprotein profile and restored insulin sensitivity, while on the ethanol diet than the WT. They also demonstrated protection from alcohol-induced steatosis and liver damage and had less WAT inflammation. In liver and WAT the expression of the key lipogenic and adipocytokine mRNAs, such as Fas and Ccl2, were downregulated, respectively. The upregulation of metabolic and antioxidant hypoxia-inducible factor (HIF) target genes, such as Slcs 16a1 and 16a3 and Gclc, respectively, and a higher catalytic activity of ALDH2 in the HIF-P4H-2-deficient hepatocytes improved handling of the toxic ethanol metabolites and oxidative stress. Pharmacological HIF-P4H inhibition in the WT mice phenocopied the protection against AFLD. Our data show that global genetic inactivation of HIF-P4H-2 and pharmacological HIF-P4H inhibition can protect mice from alcohol-induced steatosis and liver injury, suggesting that HIF-P4H inhibitors, now in clinical trials for renal anemia, could also be studied in randomized clinical trials for treatment of AFLD.