Background/Aims: Previously, we confirmed that liver-synthesized 5-HT rather than non-liver 5-HT, acting on the 5-HT2 receptor (5-HT2R), modulates lipid-induced excessive lipid synthesis (ELS). Here, we further revealed the effects of the hepatocellular 5-HT system in diabetes-related disorders. Methods: Studies were conducted in male ICR mice, human HepG2 cells, and primary mouse hepatocytes (PMHs) under gene or chemical inhibition of the 5-HT system, key lipid metabolism, and inflammation-related factors. Protein and messenger RNA expression and levels of the factors were determined via western blotting, reverse transcription PCR, and quantitative assay kits, respectively. Hepatic steatosis with inflammation and fibrosis, intracellular lipid droplet accumulation (LDA), and reactive oxygen species (ROS) location were determined via hematoxylin and eosin, Masson’s trichrome, Oil red O, and fluorescent-specific staining, respectively. Results: Palmitic acid induced the activation of the 5-HT system: the activation of 5-HT2R, primarily 5-HT2AR, in addition to upregulating monoamine oxidase A (MAO-A) expression and 5-HT synthesis, by activating the G protein/ phospholipase C pathway modulated PKCε activation, resulting in ELS with LDA; the activation of NF-κB, which mediates the generation of pro-inflammatory cytokines, was primarily due to ROS generation in the mitochondria induced by MAO-A–catalyzed 5-HT degradation, and secondarily due to the activation of PKCε. These effects of the 5-HT system were also detected in palmitic acid- or high glucose-treated PMHs and regulated multiple inflammatory signaling pathways. In diabetic mice, co-treatment with antagonists of both 5-HT synthesis and 5-HT2R significantly abolished hepatic steatosis, inflammation, and fibrosis as well as hyperglycemia and dyslipidemia. Conclusion: Activation of the hepatocellular 5-HT system plays a crucial role in inducing diabetes-related hepatic dysfunction and is a potential therapeutic target.