OBJECTIVE: Cytochrome P4502E1 (CYP2E1) expression in the liver is increased in nonalcoholic fatty liver disease. The aim of this study was to determine whether CYP2E1 overexpression in the liver interferes with insulin signaling pathways in a mouse model of nonalcoholic fatty liver disease. METHODS: Male mice containing the human CYP2E1 transgene under control of the mouse albumin enhancer-promoter (Tg) and control, nontransgenic mice were fed a diet containing 20% calories from fat for 8 months ad libitum. MEASUREMENTS: Liver injury was measured by histology and alanine aminotransferase. Malondialdehyde and protein carbonyls were measured as markers of oxidative stress. Total and phosphorylated proteins involved in the insulin signaling cascade were measured by western blotting. RESULTS: Tg mice had higher fasting insulin, and greater hepatic fat accumulation and histological liver injury. Malondialdehyde and protein carbonyls were increased in Tg mice liver indicating increased oxidative stress. Tyrosine phosphorylation of insulin receptor substrates 1 and 2, and serine phosphorylation of PKB/Akt, were significantly decreased in Tg mice. Serine phosphorylation of glycogen synthase kinase 3alpha was decreased in Tg mice and liver glycogen content was decreased correspondingly. Serine phosphorylation of the transcription factor Fox01a was decreased, and expression of the enzyme phosphoenolcarboxykinase was increased in Tg mice. CONCLUSION: Hepatocyte-specific overexpression of CYP2E1 increased hepatic oxidative stress in the liver, fasting insulin, and histological liver damage. CYP2E1 overexpression reduced hepatic insulin signaling and reduced glycogen storage and increased glucose synthesis. Overall, this study suggests an association of hepatic CYP2E1 with increased oxidative stress, increased systemic insulin resistance, decreased insulin signaling in the liver and increased hepatic fat accumulation.