Mitochondrial ATPase ATAD3A is essential for cholesterol transport, mitochondrial structure, and cell survival. However, the relationship between ATAD3A and non‐alcoholic fatty liver disease (NAFLD) is largely unknown. In this study, we found that ATAD3A was upregulated in the progression of NAFLD in livers from rats with diet‐induced non‐alcoholic steatohepatitis (NASH) and in human livers with NAFLD. CRISPR‐Cas9 was used to delete ATAD3A function in Huh7 human hepatocellular carcinoma cells to assess the influence of ATAD3A deletion on liver cells with free cholesterol (FC) overload induced by treatment with cholesterol plus 58035, an inhibitor for acetyl‐CoA acetyltransferase, the enzyme converting FC to cholesterol ester. The results showed that ATAD3A KO exacerbated FC accumulation under FC overload in Huh7 cells. Triglyceride (TG) levels were also significantly increased in ATAD3A KO Huh7 cells under FC overload and control conditions via inhibited lipolysis mediated by upregulation of perilipin 2. Moreover, loss of ATAD3A downregulated mitophagy‐associated PTEN‐induced kinase 1 expression in Huh7 cells under FC overload and control conditions, suggesting that ATAD3A KO blocks mitophagy. Consistently, mitochondrial mass was increased in ATAD3A KO cells under FC overload as indicated by mitochondrial protein translocase of outer mitochondrial membrane 20 (TOM20). The results also showed that loss of ATAD3A impaired mitochondrial basal respiration and ATP production in Huh7 cells under FC overload, accompanied by downregulation of mitochondrial ATP synthase. In conclusion, loss of ATAD3A promotes the progression of NAFLD through the accumulation of FC, TG, and damaged mitochondria in hepatocytes.