Non-alcoholic fatty liver disease (NAFLD) covers a broad spectrum of liver diseases ranging from steatosis to cirrhosis. There are limited data on prevention of hepatic steatosis or its progression to liver disease. Here, we tested if either transgenic (Tg) doxycycline-induced expression in adipose tissue of E4orf1 (E4), an adenoviral protein, or dietary fat restriction attenuated hepatic steatosis or its progression in mice. Twelve to fourteen-week-old TgE4 mice (E4 group) and control mice were exposed to a 60% (Kcal) high fat diet (HFD) for 20 weeks, while another group of mice on HFD for 10 weeks were switched to a chow diet (chow group) for another 10 weeks. Glycemic control was determined at weeks 10 and 20. Tissues were collected for gene and protein analysis at sacrifice. Compared to control, diet reversal significantly reduced body weight in the chow group, whereas E4 expression attenuated weight gain, despite HFD. E4 mice evinced significantly improved glucose clearance, lower endogenous insulin secretion, reduced serum triglycerides, attenuated hepatic steatosis and inflammation. Interestingly, in spite of weight loss and lower liver fat, chow mice showed significant upregulation of hepatic genes involved in lipid metabolism. Despite HFD, E4 prevents hepatic lipid accumulation and progression of hepatic steatosis, while diet reversal maintains hepatic health, but is unable to improve molecular changes.