Mitochondrial glutathione (GSH) plays a key role against tumor necrosis factor alpha (TNF)-induced apoptosis because its depletion is known to sensitize hepatocytes to TNF. The present study examined the role of tauroursodeoxycholic acid (TUDCA) administration to chronic ethanol-fed rats on mitochondrial GSH levels and kinetics, mitochondrial membrane physical properties, TNF-induced peroxide formation, and subsequent hepatocyte survival. TUDCA selectively increased the levels of GSH in mitochondria without an effect on cytosolic GSH. This outcome was accompanied by improved initial rate of GSH transport examined at low (1 mmol/L) and high (10 mmol/L) GSH concentrations both in intact mitochondria and mitoplasts prepared from ethanol-fed livers. Assessment of membrane fluidity revealed an increased order parameter in mitochondria and mitoplasts from ethanol-fed rats compared with pair-fed controls, which was prevented by TUDCA administration. Compared with hepatocytes from pair-fed rats, TNF stimulated peroxide generation in hepatocytes from ethanol-fed rats, preceding TNF-induced cell death. Administration of TUDCA to ethanol-fed rats prevented TNF-induced peroxide formation and cell death, an effect that was reversed on depletion of the recovered mitochondrial GSH levels by (R,S)-3-hydroxy-4-pentenoate before TNF treatment. The protective effect of TUDCA against TNF was not because of activation of phosphatidylinositol 3-kinase, discarding a role for a survival-dependent pathway. Thus, these findings reveal a novel role of TUDCA in protecting hepatocytes in long-term ethanol-fed rats through modulation of mitochondrial membrane fluidity and subsequent normalization of mitochondrial GSH levels.