Lipotoxicity associated with insulin resistance is central to nonalcoholic steatohepatitis (NASH) pathogenesis. To date, only weight loss fully reverses NASH pathology, but mixed peroxisome proliferator–activated receptor‐alpha/delta (PPAR‐α/δ) agonists show some efficacy. Seladelpar (MBX‐8025), a selective PPAR‐δ agonist, improves atherogenic dyslipidemia. We therefore used this agent to test whether selective PPAR‐δ activation can reverse hepatic lipotoxicity and NASH in an obese, dyslipidemic, and diabetic mouse model. From weaning, female Alms1 mutant (foz/foz) mice and wild‐type littermates were fed an atherogenic diet for 16 weeks; groups (n = 8‐12) were then randomized to receive MBX‐8025 (10 mg/kg) or vehicle (1% methylcellulose) by gavage for 8 weeks. Despite minimally altering body weight, MBX‐8025 normalized hyperglycemia, hyperinsulinemia, and glucose disposal in foz/foz mice. Serum alanine aminotransferase ranged 300‐600 U/L in vehicle‐treated foz/foz mice; MBX‐8025 reduced alanine aminotransferase by 50%. In addition, MBX‐8025 normalized serum lipids and hepatic levels of free cholesterol and other lipotoxic lipids that were increased in vehicle‐treated foz/foz versus wild‐type mice. This abolished hepatocyte ballooning and apoptosis, substantially reduced steatosis and liver inflammation, and improved liver fibrosis. In vehicle‐treated foz/foz mice, the mean nonalcoholic fatty liver disease activity score was 6.9, indicating NASH; MBX‐8025 reversed NASH in all foz/foz mice (nonalcoholic fatty liver disease activity score 3.13). Conclusion: Seladelpar improves insulin sensitivity and reverses dyslipidemia and hepatic storage of lipotoxic lipids to improve NASH pathology in atherogenic diet–fed obese diabetic mice. Selective PPAR‐δ agonists act independently of weight reduction, but counter lipotoxicity related to insulin resistance, thereby providing a novel therapy for NASH. (Hepatology Communications 2017;1:663–674)