We have proposed that steatohepatitis results from reactive oxygen species (ROS) acting on accumulated fatty acids to form proinflammatory lipoperoxides. Cytochrome P450 4a (Cyp4a) and Cyp2e1 are potential hepatic sources of ROS. We tested the hypothesis that increasing Cyp4a through activation of peroxisome proliferator-activated receptor α (PPARα) should aggravate steatohepatitis produced by feeding a methionine and choline deficient (MCD) diet. Conversely, we assessed dietary steatohepatitis in PPARα−/− mice that cannot up-regulate Cyp4a. Male wild type (wt) or PPARα−/− mice (C57BL6 background) were fed the MCD diet with or without Wy-14,643 (0.1% wt/wt), a potent PPARα agonist. Controls were fed the same diet supplemented with methionine and choline. After 5 weeks, wt mice fed the MCD diet developed moderate steatohepatitis and alanine aminotransferase (ALT) levels were increased. Wy-14,643 prevented rather than increased liver injury; ALT levels were only mildly elevated whereas steatohepatitis was absent. Wy-14,643 up-regulated mRNA for liver fatty acid binding protein and peroxisomal β-oxidation enzymes (acyl-CoA oxidase, bifunctional enzyme, and ketothiolase), thereby reducing hepatic triglycerides and preventing steatosis. In wt mice, dietary feeding up-regulated Cyp4a14 mRNA 2.7-fold and increased hepatic lipoperoxides compared with controls. Wy-14,643 prevented hepatic lipoperoxides from accumulating despite an 18-fold increase in both Cyp4a10 and Cyp4a14 mRNA. PPARα−/− mice fed the MCD diet developed more severe steatohepatitis than wt mice, and were unaffected by Wy-14,643. In conclusion, PPARα activation both increases Cyp4a expression and enhances hepatic lipid turnover; the latter effect removes fatty acids as substrate for lipid peroxidation and is sufficiently powerful to prevent the development of dietary steatohepatitis.