Hepatic osteodystrophy (HOD) is a metabolic bone disease that is often associated with chronic liver disease and is marked by bone loss. Here, we demonstrate that hepatic expression of the phosphatase PP2Acα is upregulated during HOD, leading to the downregulation of expression of the hepatokine lecithin-cholesterol acyltransferase (LCAT). Loss of LCAT function markedly exacerbates the bone loss phenotype of HOD in mice. In addition, we found that alterations in cholesterol levels are involved in the regulation of osteoblast and osteoclast activities. We also found that LCAT improves liver function and relieves liver fibrosis in the mouse HOD model by promoting reversal of cholesterol transport from the bone to the liver. In summary, defects in a liver-bone axis occur during HOD that can be targeted to ameliorate disease progression. Display omitted •High levels of PP2Acα in the liver correlate with bone loss in individuals with HOD•Upregulation of LCAT expression in the liver ameliorates bone loss in HOD mice•PP2Acα downregulates LCAT expression through dephosphorylation of USF1•LCAT improves liver function by reversing cholesterol transport from bone to liver Hepatic osteodystrophy (HOD) is a metabolic bone disease caused by chronic liver injuries. Lu et al. discovered a novel liver-bone axis in the pathogenesis of HOD involving the upregulation of hepatic PP2Acα that leads to reduced expression of the hepatokine lecithin-cholesterol acyltransferase (LCAT) and defects in reverse cholesterol transport from the bone to the liver.