Non-alcoholic fatty liver disease (NAFLD) is characterized by hepatic steatosis, insulin resistance and a systemic pro-inflammatory response. Here we show that tumour necrosis factor receptor-associated factor 3 (TRAF3) is upregulated in mouse and human livers with hepatic steatosis. After 24 weeks on a high-fat diet (HFD), obesity, insulin resistance, hepatic steatosis and inflammatory responses are significantly ameliorated in liver-specific TRAF3-knockout mice, but exacerbated in transgenic mice overexpressing TRAF3 in hepatocytes. The detrimental effects of TRAF3 on hepatic steatosis and related pathologies are confirmed in ob/ob mice. We further show that in response to HFD, hepatocyte TRAF3 binds to TGF-β-activated kinase 1 (TAK1) to induce TAK1 ubiquitination and subsequent autophosphorylation, thereby enhancing the activation of downstream IKKβ-NF-κB and MKK-JNK-IRS1(307) signalling cascades, while disrupting AKT-GSK3β/FOXO1 signalling. The TRAF3-TAK1 interaction and TAK1 ubiquitination are indispensable for TRAF3-regulated hepatic steatosis. In conclusion, hepatocyte TRAF3 promotes HFD-induced or genetic hepatic steatosis in a TAK1-dependent manner.