LncRNAs are involved in modulating the individual risk and the severity of progression in metabolic dysfunction-associated fatty liver disease (MASLD), but their precise roles remain largely unknown. This study aimed to investigate the role of lncRNA Snhg3 in the development and progression of MASLD, along with the underlying mechanisms. The result showed that Snhg3 was significantly downregulated in the liver of high-fat diet-induced obesity (DIO) mice. Notably, palmitic acid promoted the expression of Snhg3 and overexpression of Snhg3 increased lipid accumulation in primary hepatocytes. Furthermore, hepatocyte-specific Snhg3 deficiency decreased body and liver weight, alleviated hepatic steatosis and promoted hepatic fatty acid metabolism in DIO mice, whereas overexpression induced the opposite effect. Mechanistically, Snhg3 promoted the expression, stability and nuclear localization of SND1 protein via interacting with SND1, thereby inducing K63-linked ubiquitination modification of SND1. Moreover, Snhg3 decreased the H3K27me3 level and induced SND1-mediated chromatin loose remodeling, thus reducing H3K27me3 enrichment at the Pparg promoter and enhancing PPARγ expression. The administration of PPARγ antagonist T0070907 improved Snhg3-aggravated hepatic steatosis. Our study revealed a new signaling pathway, Snhg3/SND1/H3K27me3/PPARγ, responsible for mice MASLD and indicates that lncRNA-mediated epigenetic modification has a crucial role in the pathology of MASLD.