Activation of hepatocyte cannabinoid receptor-1 (CB₁R) by hepatic stellate cell (HSC)-derived 2-arachidonoylglycerol (2-AG) drives de novo lipogenesis in alcoholic liver disease (ALD). How alcohol stimulates 2-AG production in HSCs is unknown. Here, we report that chronic alcohol consumption induced hepatic cysteine deficiency and subsequent glutathione depletion by impaired transsulfuration pathway. A compensatory increase in hepatic cystine-glutamate anti-porter xCT boosted extracellular glutamate levels coupled to cystine uptake both in mice and in patients with ALD. Alcohol also induced the selective expression of metabotropic glutamate receptor-5 (mGluR5) in HSCs where mGluR5 activation stimulated 2-AG production. Consistently, genetic or pharmacologic inhibition of mGluR5 or xCT attenuated alcoholic steatosis in mice via the suppression of 2-AG production and subsequent CB₁R-mediated de novo lipogenesis. We conclude that a bidirectional signaling operates at a metabolic synapse between hepatocytes and HSCs through xCT-mediated glutamate-mGluR5 signaling to produce 2-AG, which induces CB₁R-mediated alcoholic steatosis.