During sepsis bacterial products particularly LPS trigger injury in organs such as the liver. This common condition remains largely untreatable in part due to a lack of understanding of how high concentrations of LPS cause cellular injury. In the liver, the lysosomal degradative pathway of autophagy performs essential hepatoprotective functions and is induced by LPS. We therefore examined whether hepatocyte autophagy protects against liver injury from septic levels of LPS. Mice with an inducible hepatocyte-specific knockout of the critical autophagy gene Atg7 were examined for their sensitivity to high-dose LPS. Increased liver injury occurred in knockout mice as determined by significantly increased serum alanine aminotransferase levels, histological evidence of liver injury, terminal deoxynucleotide transferase-mediated deoxyuridine triphosphate nick end-labeling and effector caspase 3 and 7 activation. Hepatic inflammation and proinflammatory cytokine induction were unaffected by the decrease in hepatocyte autophagy. Although knockout mice had normal NF-B signaling, hepatic levels of Akt1 and Akt2 phosphorylation in response to LPS were decreased. Cultured hepatocytes from knockout mice displayed a generalized defect in Akt signaling in response to multiple stimuli including LPS, TNF and IL-1β. Akt activation mediates hepatocyte resistance to TNF cytotoxicity, and anti-TNF antibodies significantly decreased LPS-induced liver injury in knockout mice, indicating that the loss of autophagy sensitized to TNF-dependent liver damage. Hepatocyte autophagy therefore mediates hepatic resistance to LPS-induced liver injury. Conditions such as aging and steatosis that impair hepatic autophagy may predispose to poor outcomes from sepsis through this mechanism.