The liver is a major organ that controls hepatic and systemic homeostasis. Dysregulation of liver metabolism may cause liver injury. Previous studies have demonstrated that carboxylesterase 1 (CES1) regulates hepatic triglyceride metabolism and protects against liver steatosis. In the present study, we investigated whether CES1 played a role in the development of alcoholic liver disease (ALD) and methionine and choline-deficient (MCD) diet-induced liver injury. Both hepatocyte nuclear factor 4α (HNF4α) and CES1 were markedly reduced in patients with alcoholic steatohepatitis. Alcohol repressed both HNF4α and CES1 expression in primary hepatocytes. HNF4α regulated CES1 expression by directly binding to the proximal promoter of CES1. Global inactivation of CES1 aggravated alcohol- or MCD diet-induced liver inflammation and liver injury, likely as a result of increased production of acetaldehyde and reactive oxygen species and mitochondrial dysfunctions. Knockdown of hepatic CES1 exacerbated ethanol-induced steatohepatitis. These data indicate that CES1 plays a crucial role in protection against alcohol- or MCD diet-induced liver injury.