Human polymorphisms in the 5 upstream regulatory regions and also protein coding regions of cytochrome P450 (CYP) 2E1 are known to be associated with several diseases including cancer and alcohol liver toxicity. In this study we report novel mutations in the N terminal protein targeting regions of CYP2E1 that markedly affect subcellular localization of the protein. Variant W23R/W30R protein (termed W23/30R) is preferentially targeted to mitochondria but very poorly to the endoplasmic reticulum, while the L32N protein is preferentially targeted to the endoplasmic reticulum and poorly to mitochondria. These results explain the physiological significance of bimodal CYP targeting to the endoplasmic reticulum (ER) and mitochondria previously described. COS 7 cells and HepG2 cells stably expressing W to R mutations showed markedly increased alcohol toxicity in terms of increased production of reactive oxygen species (ROS), respiratory dysfunction and loss of cytochrome c oxidase (CcO) subunits and activity. Stable cells expressing the L32N variant, on the other hand, were relatively less responsive to alcohol induced toxicity and mitochondrial dysfunction. These results further support our previous data based on mutational studies involving altered targeting that mitochondria targeted CYP2E1 plays an important role in alcohol liver toxicity. The results also provide an interesting new link to genetic variations affecting subcellular distribution of CYP2E1 with alcohol-induced toxicity.