Obesity-induced non-alcoholic fatty liver disease (NAFLD) develops, in part, via excess insulin-stimulated hepatic de novo lipogenesis, which increases, paradoxically, in patients with obesity-induced insulin resistance. Pleckstrin homology domain leucine-rich repeat protein phosphatase 2 (PHLPP2) terminates insulin signaling by dephosphorylating Akt; levels of PHLPP2 are reduced in livers from obese mice. We investigated whether loss of hepatic PHLPP2 is sufficient to induce fatty liver in mice, mechanisms of PHLPP2 degradation in fatty liver, and expression of genes that regulate PHLPP2 in livers of patients with NAFLD.