Background/Aims: Metabolic dysfunction-associated steatohepatitis (MASH) is an unmet clinical challenge due to the rapid increased occurrence but lacking approved drugs. Autophagy-related protein 16-like 1 (ATG16L1) plays an important role in the process of autophagy, which is indispensable for proper biogenesis of the autophagosome, but its role in modulating macrophage-related inflammation and metabolism during MASH has not been documented. Here, we aimed to elucidate the role of ATG16L1 in the progression of MASH. Methods: Expression analysis was performed with liver samples from human and mice. MASH models were induced in myeloid-specific Atg16l1-deficient and myeloid-specific Atg16l1-overexpressed mice by high-fat and high-cholesterol diet or methionine- and choline-deficient diet to explore the function and mechanism of macrophage ATG16L1 in MASH. Results: Macrophage-specific Atg16l1 knockout exacerbated MASH and inhibited energy expenditure, whereas macrophage-specific Atg16l1 transgenic overexpression attenuated MASH and promotes energy expenditure. Mechanistically, Atg16l1 knockout inhibited macrophage lipophagy, thereby suppressing macrophage β-oxidation and decreasing the production of 4-hydroxynonenal, which further inhibited stimulator of interferon genes(STING) carbonylation. STING palmitoylation was enhanced, STING trafficking from the endoplasmic reticulum to the Golgi was promoted, and downstream STING signaling was activated, promoting proinflammatory and profibrotic cytokines secretion, resulting in hepatic steatosis and hepatic stellate cells activation. Moreover, Atg16l1-deficiency enhanced macrophage phagosome ability but inhibited lysosome formation, engulfing mtDNA released by pyroptotic hepatocytes. Increased mtDNA promoted cGAS/STING signaling activation. Moreover, pharmacological promotion of ATG16L1 substantially blocked MASH progression. Conclusions ATG16L1 suppresses MASH progression by maintaining macrophage lipophagy, restraining liver inflammation, and may be a promising therapeutic target for MASH management.