Understanding the key aspects of the pathogenesis of alcoholic fatty liver disease particularly alterations to mitochondrial function remains to be resolved. The role of fatty acids in this regard requires further investigation due to their involvement in fatty liver disease and obesity. This study aimed to characterize the early effects of saturated and unsaturated fatty acids alone on liver mitochondrial function and during concomitant ethanol exposure using isolated liver mitochondria and VA-13 cells (Hep G2 cells that efficiently express alcohol dehydrogenase). Liver mitochondria or VA-13 cells were treated with increasing concentrations of palmitic or arachidonic acid (1 to 160 μM) for 24 h with or without 100 mM ethanol. The results showed that in isolated liver mitochondria both palmitic and arachidonic acids significantly reduced state 3 respiration in a concentration-dependent manner (P<0.001), implicating their ionophoric activities. Increased ROS production occurred in a dose-dependent manner especially in the presence of rotenone (complex I inhibitor), which was significantly more prominent in arachidonic acid at 80 μM (+970%, P<0.001) than palmitic acid (+40%, P<0.01). In VA-13 cells, ethanol alone and both fatty acids (40 μM) were able to decrease the mitochondrial membrane potential and cellular ATP levels and increase lipid formation. ROS production was significantly increased with arachidonic acid (+110%, P<0.001) exhibiting a greater effect than palmitic acid (+39%, P<0.05). While in the presence of ethanol, the drop in the mitochondrial membrane potential, cellular ATP levels, and increased lipid formation were further enhanced by both fatty acids, but with greater effect in the case of arachidonic acid, which also correlated with significant cytotoxicity (P<0.001). This study confirms the ability of fatty acids to promote mitochondrial injury in the development of alcoholic fatty liver disease.