Metabolic-associated fatty liver disease (MAFLD) encompasses various chronic liver conditions, yet lacks approved drugs. Hypoxia-inducible factor-1α (HIF-1α) is pivotal in MAFLD development. Our prior research highlighted the efficacy of the nano-designed carbon monoxide (CO) donor, targeting HIF-1α in a mouse hepatic steatosis model. Given heme oxygenase-1 (HO-1, a major downstream molecule of HIF-1α) as the primary source of intrinsic CO, we hypothesized that upregulation of HO-1/CO, responsive to HIF-1α, forms a negative feedback loop regulating MAFLD progression. In this study, we explored the potential negative feedback mechanism of CO on HIF-1α and its downstream effects on MAFLD advancement. HIF-1α emerges early in hepatic steatosis induced by a high-fat (HF) diet, triggering increased HO-1 and inflammation. SMA/CORM2 effectively suppresses HIF-1α and steatosis progression when administered within the initial week of HF diet initiation but loses impact later. In adipose tissues, concurrent metabolic dysfunction and inflammation with HIF-1α activation suggest adipose tissue expansion initiates HF-induced steatosis, triggering hypoxia and liver inflammation. Notably, in an in vitro study using mouse hepatocytes treated with fatty acids, downregulating HO-1 intensified HIF-1α induction at moderate fatty acid concentrations. However, this effect diminished at high concentrations. These results suggest the HIF-1α–HO–1-CO axis as a feedback loop under physiological and mild pathological conditions. Excessive HIF-1α upregulation in pathological conditions overwhelms the CO feedback loop. Additional CO application effectively suppresses HIF-1α and disease progression, indicating potential application for MAFLD control.