Background Observational studies and small intervention studies suggest alcohol raises gamma-glutamyltransferase (GGT). We used Mendelian randomization to assess the causal effect of alcohol use on GGT in older Chinese people. Methods An instrumental variable (IV) analysis in 2,321 men and 2,757 women aged 50+ years from phase 3 of the Guangzhou Biobank Cohort Study with ALDH2 (rs671) genotyped, alcohol use and GGT available was used to assess the causal effect of alcohol use on GGT. Rs671 was used as an IV and F-statistics was used to test for weak instrument hypothesis. An F-statistic of ≥10 indicates the IV is not weak. Results In men, the F-statistic for rs671 on alcohol use was 70. Using IV analysis alcohol use increased GGT by 10.60 U/L per alcohol unit (10 gram ethanol) per day (95% confidence interval (CI) 6.58 to 14.62). The estimate was lower in observational multivariate regression: 3.48 U/L GGT per alcohol unit per day (95% CI 2.84 to 4.11) adjusted for age, education, physical activity and smoking. In women, rs671 was not associated with alcohol or GGT and the F-statistic was 7 precluding IV analysis. Conclusion In Mendelian randomization, we found confirmative evidence that alcohol use increases GGT among Southern Chinese men. Moreover, we found that the ALDH2 variant rs671 was not associated with GGT among Southern Chinese women who generally consume very low levels of alcohol. Taken together our findings strongly suggest that alcohol increases GGT, although we cannot rule out the possibility that other unknown factors may cause a different relation between alcohol and GGT in other populations.