Obesity triggers the development of non-alcoholic fatty liver disease (NAFLD), which involves alterations of regulatory transcription networks and epigenomes in hepatocytes. Here we demonstrate that G protein pathway suppressor 2 (GPS2), a subunit of the nuclear receptor corepressor (NCOR) and histone deacetylase 3 (HDAC3) complex, has a central role in these alterations and accelerates the progression of NAFLD towards non-alcoholic steatohepatitis (NASH). Hepatocyte-specific Gps2 knockout in mice alleviates the development of diet-induced steatosis and fibrosis and causes activation of lipid catabolic genes. Integrative cistrome, epigenome and transcriptome analysis identifies the lipid-sensing peroxisome proliferator-activated receptor α (PPARα, NR1C1) as a direct GPS2 target. Liver gene expression data from human patients reveal that Gps2 expression positively correlates with a NASH/fibrosis gene signature. Collectively, our data suggest that the GPS2-PPARα partnership in hepatocytes coordinates the progression of NAFLD in mice and in humans and thus might be of therapeutic interest.