Abstract Nonalcoholic steatohepatitis (NASH) has emerged as the leading cause of chronic liver disease worldwide and is rapidly increasing in prevalence owing to the obesity epidemic. Incomplete understanding of the mechanisms of NASH progression, particularly fibrosis, has limited the design of therapeutic strategies. My previous published study indicated that a transcription factor in hepatocytes called TAZ (WWTR1) contributes to steatosis-to-NASH progression. However, the mechanism that induces high TAZ expression in NASH liver remains unknown. The objective of this study is to understand the mechanism of hepatocyte TAZ upregulation in NASH, which may suggest novel therapeutic strategies to prevent NASH and its comorbidities. We hypothesize that hepatic cholesterol upregulates TAZ through PKA-Ca2+-RhoA mediated Hippo pathway inactivation. In vitro, we use liposome to deplete and replete cholesterol in hepatocyte cells and check downstream signaling pathway that includes cholesterol translocation, Ca2+ signaling, RhoA activity, Hippo pathway, and E3 ligase activity. In vivo, we used different concentration cholesterol diet to build the correlation between increased TAZ/liver fibrosis and cholesterol, and AAV8-H1 mediated hepatic-gene silencing to prove the functions of the molecules in the pathway, including AsterB/C, RhoA, and Trcp. My data suggest that hepatic cholesterol accumulation is associated with liver fibrosis and increased TAZ. In addition, cholesterol loading of hepatocytes increases TAZ, and cholesterol depletion decreases TAZ in a proteasome/Trcp-dependent manner. Mechanistically, Hippo pathway kinase-Lats2 inhibits TAZ expression on the post-transcriptional level through TAZ phosphorylation. Moreover, intracellular cholesterol increases cytosolic Ca2+ and activates RhoA signaling, then represses Lats2 activity, so TAZ degradation is inhibited and total protein level increases. Finally, blocking cholesterol translocation from cell membrane to intracellular suppresses the pathway and inhibits TAZ level. We conclude that hepatic cholesterol induces high-level TAZ in NASH through PKA-Ca2+-RhoA mediated Hippo pathway inactivation, and cholesterol transportation plays an important role during this process. These data provide a plausible mechanism underlying liver cholesterol as a risk factor for NASH fibrosis and suggest new therapeutic interventions to block NASH fibrosis and to prevent NASH-associated HCC. Citation Format: Xiaobo Wang, Arun Radhakrishnan, Douglas Covey, Jay Horton, Robert Schwabe, Peter Tontonoz, Kun-Liang Guan, Ira Tabas. Hepatic cholesterol upregulates TAZ in nonalcoholic steatohepatitis [abstract]. In: Proceedings of the AACR Special Conference on the Hippo Pathway: Signaling, Cancer, and Beyond; 2019 May 8-11; San Diego, CA. Philadelphia (PA): AACR; Mol Cancer Res 2020;18(8_Suppl):Abstract nr B04.