Recent studies have identified a genetic variant rs641738 near two genes encoding membrane bound O-acyltransferase domain-containing 7 (MBOAT7) and transmembrane channel-like 4 (TMC4) that associate with increased risk of non-alcoholic fatty liver disease (NAFLD), non-alcoholic steatohepatitis (NASH), alcohol-related cirrhosis, and liver fibrosis in those infected with viral hepatitis (Buch et al., 2015; Mancina et al., 2016; Luukkonen et al., 2016; Thabet et al., 2016; Viitasalo et al., 2016; Krawczyk et al., 2017; Thabet et al., 2017). Based on hepatic expression quantitative trait loci analysis, it has been suggested that MBOAT7 loss of function promotes liver disease progression (Buch et al., 2015; Mancina et al., 2016; Luukkonen et al., 2016; Thabet et al., 2016; Viitasalo et al., 2016; Krawczyk et al., 2017; Thabet et al., 2017), but this has never been formally tested. Here we show that Mboat7 loss, but not Tmc4, in mice is sufficient to promote the progression of NAFLD in the setting of high fat diet. Mboat7 loss of function is associated with accumulation of its substrate lysophosphatidylinositol (LPI) lipids, and direct administration of LPI promotes hepatic inflammatory and fibrotic transcriptional changes in an Mboat7-dependent manner. These studies reveal a novel role for MBOAT7-driven acylation of LPI lipids in suppressing the progression of NAFLD.