Only ~20% of heavy drinkers develop alcohol cirrhosis (AC). While differences in metabolism, inflammation, signaling, microbiome signatures and genetic variations have been tied to the pathogenesis of AC, the key underlying mechanisms for this interindividual variability, remain to be fully elucidated. Induced pluripotent stem cell-derived hepatocytes (iHLCs) from patients with AC and healthy controls differ transcriptomically, bioenergetically and histologically. They include a greater number of lipid droplets (LDs) and LD-associated mitochondria compared to control cells. These pre-pathologic indicators are effectively reversed by Aramchol, an inhibitor of stearoyl-CoA desaturase. Bioenergetically, AC iHLCs have lower spare capacity, slower ATP production and their mitochondrial fuel flexibility towards fatty acids and glutamate is weakened. MARC1 and PNPLA3, genes implicated by GWAS in alcohol cirrhosis, show to correlate with lipid droplet-associated and mitochondria-mediated oxidative damage in AC iHLCs. Knockdown of PNPLA3 expression exacerbates mitochondrial deficits and leads to lipid droplets alterations. These findings suggest that differences in mitochondrial bioenergetics and lipid droplet formation are intrinsic to AC hepatocytes and can play a role in its pathogenesis.