BACKGROUND: The incidence of non-alcoholic fatty liver disease (NAFLD)-associated hepatocellular carcinoma (HCC) is increasing worldwide, but the steps in precancerous hepatocytes which lead to HCC driver mutations are not well understood. Here we provide evidence that metabolically driven histone hyperacetylation in steatotic hepatocytes can increase DNA damage to initiate carcinogenesis. METHODS: Global epigenetic state was assessed in liver samples from high-fat diet or high-fructose diet rodent models, as well as in cultured immortalized human hepatocytes (IHH cells). The mechanisms linking steatosis, histone acetylation and DNA damage were investigated by computational metabolic modelling as well as through manipulation of IHH cells with metabolic and epigenetic inhibitors. Chromatin immunoprecipitation and next-generation sequencing (ChIP-seq) and transcriptome (RNA-seq) analyses were performed on IHH cells. Mutation locations and patterns were compared between the IHH cell model and genome sequence data from preneoplastic fatty liver samples from patients with alcohol-related liver disease and NAFLD. RESULTS: Genome-wide histone acetylation was increased in steatotic livers of rodents fed high-fructose or high-fat diet. In vitro, steatosis relaxed chromatin and increased DNA damage marker γH2AX, which was reversed by inhibiting acetyl-CoA production. Steatosis-associated acetylation and γH2AX were enriched at gene clusters in telomere-proximal regions which contained HCC tumour suppressors in hepatocytes and human fatty livers. Regions of metabolically driven epigenetic change also had increased levels of DNA mutation in non-cancerous tissue from NAFLD and alcohol-related liver disease patients. Finally, genome-scale network modelling indicated that redox balance could be a key contributor to this mechanism. CONCLUSIONS: Abnormal histone hyperacetylation facilitates DNA damage in steatotic hepatocytes and is a potential initiating event in hepatocellular carcinogenesis.