Tumor necrosis factor-α-induced protein 8 (TNFAIP8) expression has been linked to tumor progression in various cancer types, but the detailed mechanisms of TNFAIP8 are not fully elucidated. Here we define the role of TNFAIP8 in early events associated with development of hepatocellular carcinoma (HCC). Increased TNFAIP8 levels in HCC cells enhanced cell survival by blocking apoptosis, rendering HCC cells more resistant to the anticancer drugs, sorafenib and regorafenib. TNFAIP8 also induced autophagy and steatosis in liver cancer cells. Consistent with these observations, TNFAIP8 blocked AKT/mTOR signaling and showed direct interaction with ATG3-ATG7 proteins. TNFAIP8 also exhibited binding with fatty acids and modulated expression of lipid/fatty-acid metabolizing enzymes. Chronic feeding of mice with alcohol increased hepatic levels of TNFAIP8, autophagy, and steatosis but not in high-fat-fed obese mice. Similarly, higher TNFAIP8 expression was associated with steatotic livers of human patients with a history of alcohol use but not in steatotic patients with no history of alcohol use. Our data indicate a novel role of TNFAIP8 in modulation of drug resistance, autophagy, and hepatic steatosis, all key early events in HCC progression.