Chronic inflammation is a known hallmark of cancer and is central to the onset and progression of hepatocellular carcinoma (HCC). Hepatic macrophages play a critical role in the inflammatory process leading to HCC. The oncogene Astrocyte elevated gene-1 () regulates NFκB activation, and germline knockout of in mice (AEG-1) results in resistance to inflammation and experimental HCC. In this study, we developed conditional hepatocyte- and myeloid cell-specific AEG-1 mice (AEG-1 and AEG-1, respectively) and induced HCC by treatment with N-nitrosodiethylamine (DEN) and phenobarbital (PB). AEG-1 mice exhibited a significant reduction in disease severity compared with control littermates, while AEG-1 mice were profoundly resistant. , AEG-1 hepatocytes exhibited increased sensitivity to stress and senescence. Notably, AEG-1 macrophages were resistant to either M1 or M2 differentiation with significant inhibition in migration, endothelial adhesion, and efferocytosis activity, indicating that AEG-1 ablation renders macrophages functionally anergic. These results unravel a central role of AEG-1 in regulating macrophage activation and indicate that AEG-1 is required in both tumor cells and tumor microenvironment to stimulate hepatocarcinogenesis. These findings distinguish a novel role of macrophage-derived oncogene AEG-1 from hepatocellular AEG-1 in promoting inflammation and driving tumorigenesis. .