Metabolic dysfunction and alcohol-associated liver disease (MetALD) represents a distinct subgroup of steatotic liver disease (SLD), characterized by hepatic steatosis driven by concurrent metabolic dysfunction and heavy alcohol intake. Alcohol consumption remains a primary modifiable risk factor, potentiating liver disease progression, particularly when combined with metabolic comorbidities, such as obesity, insulin resistance, dyslipidemia, and hypertension. Genetic variants, including PNPLA3, TM6SF2, and MBOAT7, further influence individual susceptibility, exacerbating hepatic injury and fibrosis. Pathophysiologically, MetALD arises from a complex interplay of intrahepatic and extrahepatic mechanisms, notably adipose tissue dysfunction, gut-liver axis dysbiosis, increased intestinal permeability, and disrupted bile acid signaling pathways. Hepatic lipotoxicity, cellular injury, immune activation, and subsequent fibrogenesis are central processes accelerating progression to advanced fibrosis, cirrhosis, and hepatocellular carcinoma. Diagnostic challenges persist, primarily due to inconsistent definitions of significant alcohol intake and metabolic dysfunction criteria, complicating disease classification. Liver biopsy, though definitive, frequently fails to discriminate MetALD from isolated metabolic or alcohol-associated etiologies due to overlapping histological features. Management strategies for MetALD necessitate an integrated approach targeting both metabolic and alcohol-related factors, emphasizing lifestyle interventions, alcohol cessation programs, and pharmacotherapy. Promising pharmacologic agents include medications for alcohol use disorder (e.g., naltrexone) and agents that may reduce liver fat and alcohol consumption concurrently, such as glucagon-like peptide-1 receptor agonists and FGF21 analogs. Despite growing recognition, MetALD remains under-studied, highlighting critical research gaps, including refined diagnostic criteria, noninvasive biomarkers, tailored clinical trials, and comprehensive outcome assessments. Addressing these gaps is essential to improve prognostication, risk stratification, and therapeutic outcomes in this increasingly prevalent clinical entity.