Non-alcoholic fatty liver disease (NAFLD) is prevalent in the majority of obese individuals, but in a subset, this progresses to non-alcoholic steatohepatitis (NASH) and fibrosis. The mechanisms that might prevent NASH and fibrosis in most NAFLD patients remain unclear. Here we report that NAD(P)H oxidase (NOX)-4 and nuclear factor erythroid 2-related factor 2 (NFE2L2) are elevated in hepatocytes early in disease progression to prevent the development of NASH/fibrosis. We show that mitochondrial-derived reactive oxygen species (ROS) activate NFE2L2 to induce the expression of NOX4, generating H2O2 to exacerbate the NFE2L2 antioxidant defence response. The deletion or inhibition of NOX4 in hepatocytes decreased ROS and attenuated the antioxidant defence response to promote mitochondrial oxidative stress, damage proteins and lipids, diminish insulin signalling and promote cell death upon oxidant challenge. Hepatocyte NOX4 deletion in high fat fed obese mice, which otherwise develop steatosis, but not NASH, resulted in hepatic oxidative damage, inflammation and T cell recruitment to drive NASH and fibrosis. Thus, mitochondrial- and NOX4-derived ROS function in concert to drive an NFE2L2 antioxidant defence response to attenuate oxidative liver damage and the progression to NASH/fibrosis in obesity.