Aims: Nonalcoholic fatty liver (NAFL) is a common liver disease associated with metabolic syndrome, obesity, and diabetes that is rising in prevalence worldwide. Various molecular perturbations of key regulators and enzymes in hepatic lipid metabolism cause NAFL. However, redox regulation through glutathione (GSH) adducts in NAFL remains largely elusive. Glutaredoxin-1 (Glrx) is a small thioltransferase that removes protein GSH adducts without having direct antioxidant properties. The liver contains abundant Glrx but its metabolic function is unknown. Results: Here we report that normal diet-fed Glrx-deficient mice (Glrx -/-) spontaneously develop obesity, hyperlipidemia, and hepatic steatosis by 8 months of age. Adenoviral Glrx repletion in the liver of Glrx -/-mice corrected lipid metabolism. Glrx -/-mice exhibited decreased sirtuin-1 (SirT1) activity that leads to hyperacetylation and activation of SREBP-1 and upregulation of key hepatic enzymes involved in lipid synthesis. We found that GSH adducts inhibited SirT1 activity in Glrx -/-mice. Hepatic expression of nonoxidizable cysteine mutant SirT1 corrected hepatic lipids in Glrx -/-mice. Wild-type mice fed high-fat diet develop metabolic syndrome, diabetes, and NAFL within several months. Glrx deficiency accelerated high-fat-induced NAFL and progression to steatohepatitis, manifested by hepatic damage and inflammation. Innovation: These data suggest an essential role of hepatic Glrx in regulating SirT1, which controls protein glutathione adducts in the pathogenesis of hepatic steatosis. Conclusion: We provide a novel redox-dependent mechanism for regulation of hepatic lipid metabolism, and propose that upregulation of hepatic Glrx may be a beneficial strategy for NAFL. Antioxid. Redox Signal. 27, 313-327.