Complement receptor of immunoglobulin superfamily (CRIg) is expressed on liver macrophages and directly binds complement component C3b or Gram-positive bacteria to mediate phagocytosis. CRIg plays important roles in several immune-mediated diseases, but it is not clear how its pathogen recognition and phagocytic functions maintain homeostasis and prevent disease. We previously associated cytolysin-positive Enterococcus faecalis with severity of alcohol-related liver disease. Here, we demonstrate that CRIg is reduced in liver tissues from patients with alcohol-related liver disease. CRIg-deficient mice developed more severe ethanol-induced liver disease than wild-type mice; disease severity was reduced with loss of toll-like receptor 2. CRIg-deficient mice were less efficient than wild-type mice at clearing Gram-positive bacteria such as Enterococcus faecalis that had translocated from gut to liver. Administration of the soluble extracellular domain CRIg–Ig protein protected mice from ethanol-induced steatohepatitis. Our findings indicate that ethanol impairs hepatic clearance of translocated pathobionts, via decreased hepatic CRIg, which facilitates progression of liver disease.