Nonalcoholic fatty liver disease (NAFLD) is associated with the development of metabolic syndromes and hepatocellular carcinoma (HCC). Cholesterol accumulation is related to NAFLD, whereas its detailed mechanism is not fully understood. Previously, we reported that glycine N-methyltransferase (GNMT) knockout (Gnmt ings and coimmunoprecipitation assays elucidated that the C conserved region (81-105 amino acids) of NPC2 interacts with the carboxyl-terminal fragment (171-295 amino acids) of GNMT. Confocal microscopy demonstrated that when cells were treated with low-density lipoprotein, NPC2 was released from lysosomes and interacts with GNMT in the cytosol. Overexpression of GNMT doubled the half-lives of both NPC2 isoforms and reduced cholesterol accumulation in cells. Furthermore, GNMT was downregulated in the liver tissues from patients suffering with NAFLD as well as from mice fed a high-fat diet, high-cholesterol diet or methionine/choline-deficient diet. In conclusion, our study demonstrated that GNMT regulates the homeostasis of cholesterol metabolism, and hepatic cholesterol accumulation may result from downregulation of GNMT and instability of its interactive protein NPC2. Novel therapeutics for steatohepatitis and HCC may be developed by using this concept.