Alcohol-related hepatocellular carcinoma (HCC) develops with advanced alcoholic liver disease and liver fibrosis. Using adult mice, we evaluate the effect of alcoholic steatohepatitis on early hepatobiliary carcinoma after initiation by diethyl-nitrosamine (DEN). Here we show that alcohol-fed DEN-injected mice have higher ALT and liver-to-body weight ratio compared to pair-fed DEN-injected mice. Alcohol feeding results in steatohepatitis indicated by increased pro-inflammatory cytokines and fibrotic genes. MRI and liver histology of alcohol+DEN mice shows hepatobiliary cysts, early hepatic neoplasia and increase in serum alpha-fetoprotein. Proliferation makers (BrdU, cyclin D1, p53) and cancer stem cell markers (CD133 and nanog) are significantly up-regulated in livers of alcohol-fed DEN-injected mice compared to controls. In livers with tumors, loss of miR-122 expression with a significant up-regulation of miR-122 target HIF-1alpha is seen. We conclude that alcoholic steatohepatitis accelerates hepatobiliary tumors with characteristic molecular features of HCC by up-regulating inflammation, cell proliferation, stemness, and miR-122 loss.