Non-alcoholic fatty liver disease is an obesity-related chronic liver disorder ranging from simple steatosis to non-alcoholic steatohepatitis (NASH), which may progress to liver fibrosis and cirrhosis. Tto investigate the role of Toll-like receptor (TLR) 4 in mediating the transition from steatosis to inflammation. ApoE(-/-)/TLR4(mut) mice and ApoE(-/-)/TLR4 wild-type mice (ApoE(-/-)/TLR4-WT) were generated by cross-breeding an ApoE-deficient (ApoE(-/-)) strain with TLR4-mutant (TLR4(mut)) mice, which were fed with high-fat, high-cholesterol (HFHC) diet to induce obesity. ApoE(-/-)/TLR4-WT mice fed with an HFHC diet for 12 weeks developed typical pathological features of NASH, which is associated with obesity and the metabolic syndrome. By contrast, ApoE(-/-)/TLR4(mut) mice lacking functional TLR4 were resistant to HFHC diet-induced liver inflammation and injury and were less susceptible to the diet-induced production of reactive oxygen species (ROS) and proinflammatory cytokines. In ApoE(-/-)/TLR4-WT mice, X-box binding protein-1 (XBP-1), a transcription factor involved in the unfolded protein responses, was activated in the liver by an HFHC diet, whereas XBP-1 activation was abrogated in ApoE(-/-)/TLR4(mut) mice. In primary rat Kupffer cells, endotoxin induced XBP-1 activation through ROS production, whereas siRNA-mediated knockdown of XBP-1 expression resulted in a marked attenuation in endotoxin-evoked NF-κB activation and cytokine production. Furthermore, adenovirus-mediated expression of dominant negative XBP-1 led to a significant attenuation in HFHC diet-induced liver inflammation and injury in mice. These findings support the key role of TLR4 in Kupffer cells in mediating the progression of simple steatosis to NASH, by inducing ROS-dependent activation of XBP-1.