A lasting imbalance between fatty acid synthesis and consumption leads to non-alcoholic fatty liver disease (NAFLD), coupled with hepatitis and insulin resistance. Yet the details of the underlying mechanisms are not fully understood. Here, we unraveled that the expression of the transcription factor Zbtb18 is markedly decreased in the livers of both patients and murine models of NAFLD. Hepatic Zbtb18 knockout promoted NAFLD features like impaired energy expenditure and fatty acid oxidation (FAO), and induced insulin resistance. Conversely, hepatic Zbtb18 overexpression alleviated hepato-steatosis, insulin resistance, and hyperglycemia in mice fed on a high-fat diet (HFD) or in diabetic mice. Notably, in vitro and in vivo mechanistic studies revealed that Zbtb18 transcriptional activation of Farnesoid X receptor (FXR) mediated FAO and Clathrin Heavy Chain (CLTC) protein hinders NLRP3 inflammasome activity. This key mechanism by which hepatocyte's Zbtb18 expression alleviates NAFLD and consequent liver fibrosis was further verified by FXR's deletion and forced expression in mice and cultured mouse primary hepatocytes (MPHs). Moreover, CLTC deletion significantly abrogated the hepatic Zbtb18 overexpression-driven inhibition of NLRP3 inflammasome activity in macrophages. Altogether, Zbtb18 transcriptionally activates the FXR-mediated FAO and CLTC expression, which inhibits NLRP3 inflammasome's activity alleviating inflammatory stress and insulin resistance, representing an attractive remedy for hepatic steatosis and fibrosis.© 2024. The Author(s).