The influence of ethanol on the small molecule metabolome and the role of CYP2E1 in ethanol-induced hepatotoxicity were investigated using liquid chromatography-mass spectrometry (LC-MS)-based metabolomics platform and Cyp2e1-null mouse model. Histological and biochemical examinations of ethanol-exposed mice indicated that the Cyp2e1-null mice were more resistant to ethanol-induced hepatic steatosis and transaminase leakage than the wild-type mice, suggesting CYP2E1 contributes to ethanol-induced toxicity. Metabolomic analysis of urinary metabolites revealed time- and dose-dependent changes in the chemical composition of urine. Along with ethyl glucuronide and ethyl sulfate, N-acetyltaurine (NAT) was identified as a urinary metabolite that is highly responsive to ethanol exposure and is correlated with the presence of CYP2E1. Subsequent stable isotope labeling analysis using deuterated ethanol determined that NAT is a novel metabolite of ethanol. Among three possible substrates of NAT biosynthesis (taurine, acetyl-CoA, and acetate), the level of taurine was significantly reduced, whereas the levels of acetyl-CoA and acetate were dramatically increased after ethanol exposure. In vitro incubation assays suggested that acetate is the main precursor of NAT, which was further confirmed by the stable isotope labeling analysis using deuterated acetate. The incubations of tissues and cellular fractions with taurine and acetate indicated that the kidney has the highest NAT synthase activity among the tested organs, whereas the cytosol is the main site of NAT biosynthesis inside the cell. Overall, the combination of biochemical and metabolomic analysis revealed NAT is a novel metabolite of ethanol and a potential biomarker of hyperacetatemia.