Smoking is a major risk factor for diabetes and cardiovascular disease and may contribute to nonalcoholic fatty liver disease. We hypothesize that in the presence of nicotine, high-fat diet (HFD) causes more severe hepatic steatosis in obese mice. Adult C57BL6 male mice were fed a normal chow diet or HFD and received twice daily injections of nicotine (0.75 mg/kg body weight, ip) or saline for 10 wk. Light microscopic image analysis revealed significantly higher lipid accumulation in livers from mice on HFD plus nicotine (190 ± 19 μm(2)), compared with mice on HFD alone (28 ± 1.2 μm(2)). A significant reduction in the percent volume of endoplasmic reticulum (67.8%) and glycogen (49.2%) was also noted in hepatocytes from mice on HFD plus nicotine, compared with mice on HFD alone. The additive effects of nicotine on the severity of HFD-induced hepatic steatosis was associated with significantly greater oxidative stress, increased hepatic triglyceride levels, higher incidence of hepatocellular apoptosis, inactivation (dephosphorylation) of AMP-activated protein kinase, and activation of its downstream target acetyl-coenzyme A-carboxylase. Treatment with acipimox, an inhibitor of lipolysis, significantly reduced nicotine plus HFD-induced hepatic lipid accumulation. We conclude that: 1) greater oxidative stress coupled with inactivation of AMP-activated protein kinase mediate the additive effects of nicotine and HFD on hepatic steatosis in obese mice and 2) increased lipolysis is an important contributor to hepatic steatosis. We surmise that nicotine exposure is likely to exacerbate the metabolic abnormalities induced by high-fat intake in obese patients.