OBJECTIVE: Increased hepatic expression of dipeptidyl peptidase 4 (DPP4) is associated with non-alcoholic fatty liver disease (NAFLD). Whether this is causative for the development of NAFLD is not yet clarified. Here we investigate the effect of hepatic DPP4 overexpression on the development of liver steatosis in a mouse model of diet-induced obesity. METHODS: Plasma DPP4 activity of subjects with or without NAFLD was analyzed. Wild-type (WT) and liver-specific Dpp4 transgenic mice (Dpp4-Liv-Tg) were fed a high-fat diet and characterized for body weight, body composition, hepatic fat content and insulin sensitivity. In vitro experiments on HepG2 cells and primary mouse hepatocytes were conducted to validate cell autonomous effects of DPP4 on lipid storage and insulin sensitivity. RESULTS: Subjects suffering from insulin resistance and NAFLD show an increased plasma DPP4 activity when compared to healthy controls. Analysis of Dpp4-Liv-Tg mice revealed elevated systemic DPP4 activity and diminished active GLP-1 levels. They furthermore show increased body weight, fat mass, adipose tissue inflammation, hepatic steatosis, liver damage and hypercholesterolemia. These effects were accompanied by increased expression of PPARγ and CD36 as well as severe insulin resistance in the liver. In agreement, treatment of HepG2 cells and primary hepatocytes with physiological concentrations of DPP4 resulted in impaired insulin sensitivity independent of lipid content. CONCLUSIONS: Our results give evidence that elevated expression of DPP4 in the liver promotes NAFLD and insulin resistance. This is linked to reduced levels of active GLP-1, but also to auto- and paracrine effects of DPP4 on hepatic insulin signaling.