Gamma-glutamylcysteine ethyl ester (GCEE) is a precursor of glutathione (GSH) with promising hepatoprotective effects. This investigation aimed to evaluate the hepatoprotective effects of GCEE against cyclophosphamide- (CP-) induced toxicity, pointing to the possible role of peroxisome proliferator activated receptor gamma (PPARγ). Wistar rats were given GCEE two weeks prior to CP. Five days after CP administration, animals were sacrificed and samples were collected. Pretreatment with GCEE significantly alleviated CP-induced liver injury by reducing serum aminotransferases, increasing albumin, and preventing histopathological and hematological alterations. GCEE suppressed lipid peroxidation and nitric oxide production and restored GSH and enzymatic antioxidants in the liver, which were associated with downregulation of COX-2, iNOS, and NF-κB. In addition, CP administration significantly increased serum proinflammatory cytokines and the expression of liver caspase-3 and BAX, an effect that was reversed by GCEE. CP-induced rats showed significant downregulation of PPARγ which was markedly upregulated by GCEE treatment. These data demonstrated that pretreatment with GCEE protected against CP-induced hepatotoxicity, possibly by activating PPARγ, preventing GSH depletion, and attenuating oxidative stress, inflammation, and apoptosis. Our findings point to the role of PPARγ and suggest that GCEE might be a promising agent for the prevention of CP-induced liver injury.