ABSTRACT Saturated fatty acids (SFA) and their toxic metabolites contribute to hepatocyte lipotoxicity in nonalcoholic steatohepatitis (NASH). We previously reported that hepatocytes, under lipotoxic stress, express the potent macrophage chemotactic ligand C‐X‐C motif chemokine 10 (CXCL10), and release CXCL10‐enriched extracellular vesicles (EV) by a mixed lineage kinase (MLK) 3‐dependent mechanism. In the current study, we sought to examine the signaling pathway responsible for CXCL10 induction during hepatocyte lipotoxicity. Here, we demonstrate a role for signal transducer and activator of transcription (STAT) 1 in regulating CXCL10 expression. Huh7 and HepG2 cells were treated with lysophosphatidylcholine (LPC), the toxic metabolite of the SFA palmitate. In LPC‐treated hepatocytes, CXCL10 induction is mediated by a mitogen activated protein kinase (MAPK) signaling cascade consisting of a relay kinase module of MLK3, MKK3/6, and p38. P38 in turn induces STAT1 Ser727 phosphorylation and CXCL10 upregulation in hepatocytes, which is reduced by genetic or pharmacological inhibition of this MAPK signaling cascade. The binding and activity of STAT1 at the CXCL10 gene promoter were identified by chromatin immunoprecipitation and luciferase gene expression assays. Promoter activation was attenuated by MLK3/STAT1 inhibition or by deletion of the consensus STAT1 binding sites within the CXCL10 promoter. In lipotoxic hepatocytes, MLK3 activates a MAPK signaling cascade, resulting in the activating phosphorylation of STAT1, and CXCL10 transcriptional upregulation. Hence, this kinase relay module and/or STAT1 inhibition may serve as a therapeutic target to reduce CXCL10 release, thereby attenuating NASH pathogenesis. J. Cell. Biochem. 118: 3249–3259, 2017. © 2017 Wiley Periodicals, Inc. MLK3 mediates CXCL10 induction during hepatocyte lipotoxicity by triggering a MAPK signaling pathway that induces the activating phosphorylation of MKK3/6, p38 resulting in STAT1 phosphorylation at Ser727, and its nuclear localization. Phospho‐Ser727 STAT1 binds to and activates the CXCL10 gene promoter. These events lead to transcriptional upregulation of CXCL10 and present promising therapeutic targets in NASH.