The liver stores substantial numbers of neutral lipid organelles termed lipid droplets (LDs) that accumulate within hepatocytes in response to chronic ethanol (EtOH) consumption leading to hepatic steatosis. Mass spectrometry analysis of LDs isolated from EtOH-damaged rat livers revealed a substantial reduction in the valosin-containing protein ATPase (VCP/p97) that acts to remove targeted proteins from cellular membranes for degradation. Experimental disruption of VCP function resulted in an increase in LD content in hepatocytes and mouse livers along with a marked increase in LD-associated hydroxysteroid dehydrogenase (HSD17β13) known to contribute to hepatic steatosis. Surprisingly, treatment of hepatocytes with the proteasome inhibitor MG132 had no effect on HSD17β13 levels, while a disruption of lysosome function and chaperone-mediated autophagy increased cellular HSD17β13 levels substantially. These findings provide new insights into the cellular mechanisms by which the liver regulates its lipid stores and how this is disrupted by chronic EtOH exposure.