There has been a dramatic increase in alcoholic liver disease in Scotland over recent years. Alcoholic hepatitis is perhaps the most florid manifestation of this, however considerable controversy exists regarding its diagnosis and management. This review indicates that it is possible to confidently make a diagnosis of alcoholic hepatitis on clinical grounds using a minimum threshold of serum bilirubin as a diagnostic criterion. All patients with alcoholic hepatitis need nutritional assessment and support. The severity of alcoholic hepatitis can be ascertained using the Discriminant Function, however the Glasgow Alcoholic Hepatitis Score appears to be more specific and accurate predictor of outcome. Patients with severe disease should be considered for specific treatment. The evidence is in favour of corticosteroids which have the added benefit of allowing responsiveness to the treatment to be assessed after one week. Pentoxifylline may be a useful alternative to corticosteroids. The patients with alcoholic hepatitis and concomitant sepsis have a very poor prognosis. Previously regarded as a contraindication to specific treatment, it might be beneficial to broaden the indications for corticosteroids or pentoxifylline in these patients.