Nonalcoholic fatty liver disease (NAFLD) is characterized by lipid accumulation in the liver that may progress to hepatic fibrosis and nonalcoholic steatohepatitis (NASH). Mechanisms underlying NAFLD and NASH are not yet fully understood. Dietary cholesterol was recently shown to be a risk factor for the development of NASH suggesting a role for intestinal handling of cholesterol. One important regulator of cholesterol homeostasis is the Sterol Response Element Binding Protein SREBP2 transcription factor. We tested the hypothesis that the overactivation of intestinal SREBP2 increases the susceptibility to diet-induced NASH. A transgenic mouse model with intestine specific overexpression of active SREBP2 (ISR2 mice) driven by villin promoter was used. ISR2 mice and wild type littermates were fed a regular chow diet or a high fat high cholesterol diet (HFHC: 15 % fat, 1 % cholesterol) for 15 weeks. Results showed that HFHC feeding to ISR2 mice caused hepatic inflammation with increased levels of proinflammatory cytokines. Histological examination demonstrated extensive fibrosis after a HFHC diet associated with a perivascular as well as pericellular collagen deposits in ISR2 mice as compared to wild type littermates. The severe hepatic inflammation and advanced fibrosis in ISR2 mice was not associated with a difference in lipid accumulation in ISR2 mice as compared to wild type littermates after HFHC feeding. These data indicate that overactivation of intestinal SREBP2 promotes diet-induced hepatic inflammation with features of human NASH resulting in rapid severe fibrosis and provide a novel link between regulatory processes of intestinal cholesterol and progression of fatty liver.