Chronic low-grade inflammation is a hallmark of obesity and thought to contribute to the development of obesity-related insulin resistance. Toll-like receptor 4 (Tlr4) is a key mediator of pro-inflammatory responses. Mice lacking Tlr4s are protected from diet-induced insulin resistance and inflammation; however, which Tlr4-expressing cells mediate this effect is unknown. Here we show that mice deficient in hepatocyte Tlr4 (Tlr4^LKO) exhibit improved glucose tolerance, enhanced insulin sensitivity and ameliorated hepatic steatosis despite the development of obesity after a high-fat diet (HFD) challenge. Furthermore, Tlr4^LKO mice have reduced macrophage content in white adipose tissue, as well as decreased tissue and circulating inflammatory markers. In contrast, the loss of Tlr4 activity in myeloid cells has little effect on insulin sensitivity. Collectively, these data indicate that the activation of Tlr4 on hepatocytes contributes to obesity-associated inflammation and insulin resistance, and suggest that targeting hepatocyte Tlr4 might be a useful therapeutic strategy for the treatment of type 2 diabetes.