Non-alcoholic fatty liver disease (NAFLD) is characterized by steatosis associated with liver inflammation. As NAFLD progresses, triglycerides increase within hepatocytes, causing typical vacuoles that resemble adipocytes. However, whether these morphological changes in hepatocytes indicate potential functional changes is unclear. C57BL/6J mice were fed a high-fat diet (HFD) containing 42% fat. Markers for adipocytes in the liver were measured using real-time PCR, Western blot, and double immunofluorescent labeling. Cytokines in cell culture supernatants were quantified with ELISA. To determine the macrophage phenotype, hepatic classical M1 markers and alternative M2 markers were analyzed. After a 24-week feeding period, adipocyte markers aP2 and PPARγ increased at both the mRNA and protein level in the liver of HFD-fed mice. FITC-labeled aP2 and rhodamine-labeled albumin were both stained in the cytoplasm of steatotic hepatocytes as observed under confocal laser scanning microscopy. Cell membrane-bound E-cadherin and albumin expression were reduced in steatotic hepatocytes compared to controls. However, hepatic adiponectin and adiponectin receptor-2 expression decreased with upregulation of hepatic CD36, suggesting impaired adiponectin activity in livers of HFD-fed mice. Moreover, steatotic primary hepatocytes not only released pro-inflammatory cytokines such as TNFα, MCP-1, IL-6, and IL-18, but also could activate macrophages when co-cultured in vitro. In vivo, hepatic expression of M1 genes such as iNOS and TNFα was markedly increased in HFD-fed mice. In contrast, hepatic expression of M2 genes such as Arg1 and CD206 was significantly reduced. Specifically, the ratio of TNFα to CD206 in HFD-fed mice was notably upregulated. Overexpression of adipocyte-specific genes in hepatocytes and their secretory function and epithelial phenotype impairment in NAFLD cause functional changes in steatotic hepatocytes aside from morphological changes. This suggests that adipogenic changes in hepatocytes are involved in pathogenesis of NAFLD.