Lipotoxicity, induced by saturated fatty acid (SFA)-mediated cell death, plays an important role in the pathogenesis of nonalcoholic fatty liver disease (NAFLD). The KEAP1 (kelch like ECH associated protein 1)-NFE2L2/NRF2 (nuclear factor, erythroid 2 like 2) pathway is a pivotal defense mechanism against lipotoxicity. We previously reported that SQSTM1/p62 has a cytoprotective role against lipotoxicity through activation of the noncanonical KEAP1- NFE2L2 pathway in hepatocytes. However, the underlying mechanisms and physiological relevance of this pathway have not been clearly defined. Here, we demonstrate that NFE2L2-mediated induction of SQSTM1 activates the noncanonical KEAP1-NFE2L2 pathway under lipotoxic conditions. Furthermore, we identified that SQSTM1 induces ULK1 (unc-51 like autophagy activating kinase 1) phosphorylation by facilitating the interaction between AMPK (AMP-activated protein kinase) and ULK1, leading to macroautophagy/autophagy induction, followed by KEAP1 degradation and NFE2L2 activation. Accordingly, the activity of this SQSTM1-mediated noncanonical KEAP1-NFE2L2 pathway conferred hepatoprotection against lipotoxicity in the livers of conventional sqstm1- and liver-specific sqstm1-knockout mice. Moreover, this pathway activity was evident in the livers of patients with nonalcoholic fatty liver. This axis could thus represent a novel target for NAFLD treatment.