Hepatic stellate cells (HSCs) play critical roles in liver fibrosis and hepatocellular carcinoma (HCC). Vitamin D receptor (VDR) activation in HSCs inhibits liver inflammation and fibrosis. We found that p62/SQSTM1, a protein upregulated in liver parenchymal cells but downregulated in HCC-associated HSCs, negatively controls HSC activation. Total body or HSC-specific p62 ablation potentiates HSCs and enhances inflammation, fibrosis, and HCC progression. p62 directly interacts with VDR and RXR promoting their heterodimerization, which is critical for VDR:RXR target gene recruitment. Loss of p62 in HSCs impairs the repression of fibrosis and inflammation by VDR agonists. This demonstrates that p62 is a negative regulator of liver inflammation and fibrosis through its ability to promote VDR signaling in HSCs, whose activation supports HCC. Display omitted •p62 levels are reduced in hepatic stellate cells (HSCs) in human HCC samples•Loss of p62 in HSCs results in increased fibrosis, inflammation, and HCC•p62 is critical for VDR:RXR heterodimerization and inhibition of HSC activation•Enhanced HSC activation by p62 loss impairs VDR signaling and promotes HCC In hepatocellular carcinoma (HCC), p62 is increased in hepatocytes but decreased in hepatic stellate cells (HSCs). Duran et al. show that loss of p62 in HSCs promotes HCC development by reducing the vitamin D receptor (VDR)-RXR interaction, leading to impaired repression of fibrosis and inflammation by VDR.