Non-alcoholic steatohepatitis (NASH) may develop into hepatic cirrhosis. This study aimed to investigate whether honokiol could prevent NASH induced by high-cholesterol and high-fat (CL) diet in mice and the possible mechanism involved. Mice were fed with CL diet for 12weeks to establish a NASH model; honokiol (0.02% w/w in diet) was added to evaluate its effect on NASH. Murine peritoneal macrophages, RAW264.7 and ANA-1 cells, were used to explore the possible mechanisms of honokiol on macrophage polarization. Mice developed NASH after fed with CL diet for 12weeks. Honokiol supplementation alleviated insulin resistance, hepatic steatosis, inflammation, and fibrosis induced by CL diet. Immunohistochemistry showed that honokiol induced more M2 macrophages in livers compared with CL diet alone. Honokiol decreased M1 marker genes (TNFα and MCP-1) and increased M2 marker gene (YM-1, IL-10, IL-4R and IL-13) expression in mice liver compared with CL diet. Moreover, treatment with honokiol lowered alanine aminotransferase and aspartate aminotransferase in serum and preserved liver from lipid peroxidation, evidenced by lowered hepatic malondialdehyde level. Honokiol has antioxidant function, as honokiol upregulated hepatic glutathione and superoxide dismutase level and downregulated hepatic CYP2E1 protein level. Hepatic peroxisome proliferator-activated receptor γ (PPARγ) and its target genes were upregulated by honokiol. Furthermore, honokiol (10μM) treatment in mouse peritoneal cells, RAW264.7 cells and ANA-1 cells, led to M2 macrophage polarization, whereas a PPARγ antagonist, GW9662, abolished this effect of honokiol. Honokiol can attenuate CL diet-induced NASH and the mechanism in which possibly is polarizing macrophages to M2 phenotype via PPARγ activation.