Drug‐induced liver injury (DILI) is a significant global health issue that poses high mortality and morbidity risks. One commonly observed cause of DILI is acetaminophen (APAP) overdose. GSDME is an effector protein that induces non‐canonical pyroptosis. In this study, the activation of GSDME, but not GSDMD, in the liver tissue of mice and patients with APAP‐DILI is reported. Knockout of GSDME, rather than GSDMD, in mice protected them from APAP‐DILI. Mice with hepatocyte‐specific rescue of GSDME reproduced APAP‐induced liver injury. Furthermore, alterations in the immune cell pools observed in APAP‐induced DILI, such as the replacement of TIM4+ resident Kupffer cells (KCs) by monocyte‐derived KCs, Ly6C+ monocyte infiltration, MerTk+ macrophages depletion, and neutrophil increase, reappeared in mice with hepatocyte‐specific rescue of GSDME. Mechanistically, APAP exposure led to a substantial loss of interferon‐stimulated gene 15 (ISG15), resulting in deISGylation of carbamoyl phosphate synthetase‐1 (CPS1), promoted its degradation via K48‐linked ubiquitination, causing ammonia clearance dysfunction. GSDME deletion prevented these effects. Delayed administration of dimethyl‐fumarate inhibited GSDME cleavage and alleviated ammonia accumulation, mitigating liver injury. This findings demonstrated a previously uncharacterized role of GSDME in APAP‐DILI by promoting pyroptosis and CPS1 deISGylation, suggesting that inhibiting GSDME can be a promising therapeutic option for APAP‐DILI.