Introduction: Though heavy alcohol drinking has been well characterized as causing a variety of injuries, recent epidemiological evidence in humans suggests moderate consumption may provide beneficial effects. For example, there exists a J- or U-shaped relationship between the level of alcohol intake and cardiovascular disease risk. We investigated the underlying mechanisms of these positive consequences by identifying which genes are responsive to moderate alcohol intake in the liver, the primary site for alcohol metabolism. Methods: Twelve female, inbred, alcohol-preferring (iP10a) rats were split equally between chronic water exposure and voluntary chronic ethanol exposure. Hepatic cholesterol and triglyceride levels were analyzed both histologically and biochemically. Hepatic transcriptomes were paired-end sequenced on the Illumina HiScanSQ system. Reads were analyzed and mapped using CLCbio Genomics Workbench 4.9. We confirmed altered expression of a subset of genes using TaqMan-based qRT-PCR. To quantify DNA methylation, we first digested DNA with methylation sensitive restriction enzymes and then performed qPCR using TaqMan assays surrounding the digest sites. Calculating ?Ct between a mock digest and digest determines the percent methylation in that locus. Results: Voluntary alcohol consumption in iP10a rats modeled moderate consumption in humans. These levels did not result in intrahepatic fat accumulation. Sequencing produced ~1.2 Gb of sequence per sample, and 65% of reads mapped uniquely. Using a FDR corrected p value of 0.05 we found 250 altered transcripts. Ontology analysis of genes with a fold change =1.3 identified many cholesterol synthesis genes and cytoskeleton subunit genes, all of which were down-regulated. Of the 28 genes reanalyzed by qRT-PCR, altered expression was confirmed in 24 genes including the majority of the cholesterol synthesis and cytoskeleton subunit genes. Lastly, we profiled methylation throughout the promoter and gene body of four genes elicited in the RNA-Seq experiment. We found that alcohol caused demethylation at all loci; however this loss happened in a site-specific, tightly regulated manner. Conclusion: Voluntary consumption in the iP10a animals models moderate consumption in humans, does not produce intrahepatic fat accumulation, and causes down-regulation of a majority of cholesterol synthesis genes. Moderate alcohol also results in a tightly-regulated demethylation effect. Our results explain, at least in part, the J- or U-shaped relationship between level of alcohol intake and cardiovascular disease risk. Overall design: We sequenced 12 female iP10a rat hepatic transcriptomes providing 6 biological replicates for water control and 6 for ethanol treatment.