Contents In the onset and progression of type 2 diabetes, ceramide is significantly increased by alterations of sphingolipid metabolism, which correlated with increased insulin resistance and lipotoxicity. However, the exact roles and regulatory mechanisms by which ceramide drives hepatic steatosis, insulin resistance, and cell death remain poorly understood. Here, we examined the role of ATF3-derived ER stress on ceramide-mediated fulminant liver damages observed in alcohol-fed or HFD-fed animal models. Ceramide levels in serum or liver tissue were increased during the progression of hepatic steatosis in ethanol-fed and HFD-fed mice, which were determined by TNF-a production and TNFR1-dependent pathway. Ethanol-induced hepatic steatosis and the production of ceramide or free fatty acid were remarkably attenuated in TNFR1-/- mice. Concomitantly, a stress-inducible transcriptional factor ATF3 was significantly increased in these mice, which were strongly attenuated by treatment of myriocin, a synthetic inhibitor of ceramide, or TNFR1 knockdown. Correlatively, the expression of caveolin-1, CD36/FAT, and sphingomyelin synthase-2 (SMS2) were increased in ethanol-treated mice, which were also attenuated by TNF-a neutralization and ATF3 depletion. In fact, ATF3 overexpression potently increased ceramide-induced lipid accumulation and caveolin-1 or CD36/FAT expression, which were attenuated by ATF3 depletion. Taken together, our studies suggest that ceramide-mediated ATF3 is a critical regulatory pathway in dynamic regulation of lipid microdomains via induction of caveolin-1 and CD36/FAT, which are responsible for metabolic disorders as like in ASH and NASH models.