Alcohol-associated liver disease (AALD) is one of most common chronic liver diseases. Hepatic steatosis is the earliest stage in AALD pathological spectrum, reversible by alcohol abstinence. Untreated steatosis can progress to steatohepatitis, fibrosis and/or cirrhosis. Considering the difficulties in achieving complete abstinence, challenges in disease reversal at advanced stages, high costs of AALD management and lack of standardised prescribed medications for treatment, it is essential to explore low-cost natural compounds that can target AALD at an early stage and halt or decelerate disease progression. Betaine is a non-hazardous naturally occurring nutrient. Here, we address the mechanisms of alcohol-induced hepatic steatosis, the role of betaine in reversing the effects i.e., its action against hepatic steatosis in animal models and humans, and the associated cellular and molecular processes. Accordingly, the review discusses how betaine restores the alcohol-induced reduction in methylation potential by elevating the levels of S-adenosylmethionine and methionine. It details how betaine reinstates alcohol-induced alterations in the expressions and/or activities of protein phosphtase-2A, FOXO1, PPAR-α, AMPK, SREBP-1c, fatty acid synthase, diacylglycerol transferase-2, adiponectin and nitric oxide. Interrelationships between these factors in preventing de novo lipogenesis, reducing hepatic uptake of adipose-tissue-derived free fatty acids, promoting VLDL synthesis and secretion, and restoring β-oxidation of fatty acids to attenuate hepatic triglyceride accumulation are elaborated. Despite its therapeutic potential, very few clinical trials have examined betaine’s effect on alcohol-induced hepatic lipid accumulation. This review will provide further confidence to conduct randomised control trials to enable maximum utilisation of betaine’s remedial properties to treat alcohol-induced hepatic steatosis.