Elevating evidences suggested roles of peptidoglycan (PGN) for the insulin resistance, metabolic inflammation and liver disorders. But, whether PGN affects the occurrence of steatohepatitis remains unclear. Here, we reported that subcutaneous infusion of purified PGN for 4 weeks significantly increased hepatic levels of triglyceride, inflammation and fibrosis in mice fed normal chow. These alterations were associated with raise in circulating triglyceride, cholesterol, insulin content and inflammatory cytokines. PGN significantly increased triglyceride contents as well as lipogenesis related genes in primary hepatocytes or LO2 cells, either in basal or oleic acid treated conditions. Administration of PGN stimulated the expression of NOD2, as well as phosphorylation of p65 and IκBα, leading to subsequent nuclear translocation of p65. Over-expression of NOD2 significantly enhanced the phosphorylation of p65, levels of nuclear PPARγ and SREBP1, followed by increase in triglyceride contents in LO2 cells treated with or without oleic acid. Further, over-expression of NOD2 significantly augmented the up-regulation of PPARγ induced by rosiglitazone. Inhibition of NFκB blocked the effect of NOD2 on the upregulation of PPARγ. Our study demonstrates that PGN stimulates hepatic lipogenesis by NOD2-NFκB-PPARγ signaling. PGN from intestinal microbiota is thus sufficient to induce the progression of steatohepatitis.