Hepatocellular death or ballooning distinguishes the transition of simple steatosis to irreversible nonalcoholic steatohepatitis (NASH). However, the molecular mechanism of hepatocellular apoptosis in NASH is largely unclear, and discovery of endogenous mediators that could prevent or inhibit cell death is thereby critical in intercepting NASH progression. Here, we identified pigment epithelium-derived factor (PEDF), a secreted, moonlighting hepatokine as 1 hepatoprotective agent in mice with diet-induced NASH. Hepatic PEDF expression is induced by IL-1β, which is derived from inflammasome activation in liver-resident Kupffer cells, an effect that is negatively regulated by TNF-α and predominantly secreted by monocyte-derived, recruited, hepatic macrophages. Mechanistically, reciprocal and opposing roles for IL-1β and TNF-α in PEDF expression are mediated by differential activation of NF-κB. Although augmented TNF-α production leads to temporal reduction of PEDF expression in NASH, PEDF conversely abrogates TNF-α-mediated hepatocyte death by modulating the extrinsic apoptosis pathway. Thus, our study highlights PEDF as a functionally important hepatokine in NASH progression by linking inflammasome activation and hepatocellular death.-Adak, M., Das, D., Niyogi, S., Nagalakshmi, C., Ray, D., Chakrabarti, P. Inflammasome activation in Kupffer cells confers a protective response in nonalcoholic steatohepatitis through pigment epithelium-derived factor expression.