Background & Aims: Increased lipid peroxidation and inflammation are major factors in the pathogenesis of nonalcoholic fatty liver disease (NAFLD). A lipoxidation product that could play a role in the induction of hepatic inflammation is N-epsilon-(carboxymethyl)lysine (CML). The aim of the present study was to investigate the relationship between steatosis and CML and to study the role of CML in hepatic inflammation. Methods: We included 74 obese individuals, which were categorized into 3 groups according to the grade of hepatic steatosis. CML accumulation in liver biopsies was assessed by immunohistochemistry and plasma CML levels were measured by mass spectrometry. Plasma CML levels were also determined in the hepatic artery, portal, and hepatic vein of 22 individuals, and CML fluxes across the liver were calculated. Hepatocyte cell lines were used to study CML formation during intracellular lipid accumulation and the effect of CML on pro-inflammatory cytokine expression. Gene expression levels of the inflammatory markers were determined in liver biopsies of the obese individuals. Results: CML accumulation was significantly associated with the grade of hepatic steatosis, the grade of hepatic inflammation, and gene expression levels of inflammatory markers PAI-1, IL-8, and CRP. Analysis of CML fluxes showed no release/uptake of CML by the liver. Lipid accumulation in hepatocytes, induced by incubation with fatty acids, was associated with increased CML formation and expression of the receptor for advanced glycation endproducts (RAGE), PAI-1, IL-8, IL-6, and CRP. Pyridoxamine and aminoguanidine inhibited the endogenous CML formation and the increased RAGE, PAI-1, IL-8, IL-6, and CRP expression. Incubation of hepatocytes with CML-albumin increased the expression of RAGE, PAI-1, and IL-6, which was inhibited by an antibody against RAGE. Conclusions: Accumulation of CML and a CML-upregulated RAGE-dependent inflammatory response in steatotic livers may play an important role in hepatic steatosis and in the pathogenesis of NAFLD.