Kupffer cells become activated in response to elevated levels of LPS during ethanol feeding, but the role of ethanol in the molecular processes of activation remains unclear. Because cytochrome P4502E1 (CYP2E1) is upregulated in Kupffer cells after ethanol, we hypothesized that this effect primes Kupffer cells, sensitizing them to increase TNF-alpha production in response to LPS. However, cultured Kupffer cells rapidly lose their CYP2E1. This difficulty was overcome by transfecting CYP2E1 to RAW 264.7 macrophages. Macrophages with stable increased CYP2E1 expression (E2) displayed increased levels of CD14/Toll-like receptor 4, NADPH oxidase and H2O2, accompanied by activation of ERK1/2, p38, and NF-kappaB. These increases primed E2 cells, sensitizing them to LPS stimuli, with amplification of LPS signaling, resulting in increased TNF-alpha production. Diphenyleneiodonium, a NADPH oxidase inhibitor, and diallyl sulfide, a CYP2E1 inhibitor, decreased approximately equally H2O2 levels in E2 cells, suggesting that NADPH oxidase and CYP2E1 contribute equally to H2O2 generation. Because CYP2E1 expression also enhanced the levels of the membrane localized NADPH oxidase subunits p47phox and p67phox, thereby contributing to the oxidase activation, it may augment H2O2 generation via this mechanism. H2O2, derived in part from NADPH and CYP2E1, activated ERK1/2 and p38. ERK1/2 stimulated TNF-alpha production via activation of NF-kappaB, whereas p38 promoted TNF-alpha production by stabilizing TNF-alpha mRNA. Oxidant generation after CYP2E1 overexpression appears to be central to macrophage priming and their sensitization to LPS. Accordingly, CYP2E1 priming could explain the sensitization of Kupffer cells to LPS activation by ethanol, a critical early step in alcoholic liver disease.