Nonalcoholic fatty liver disease (NAFLD) represents a spectrum of diseases ranging from simple steatosis to more severe forms of liver injury including nonalcoholic steatohepatitis (NASH), fibrosis, and hepatocellular carcinoma (HCC). In humans, only 20%-40% of patients with fatty liver progress to NASH, and mice fed a high-fat diet (HFD) develop fatty liver but are resistant to NASH development. To understand how simple steatosis progresses to NASH, we examined hepatic expression of anti-inflammatory microRNA-223 (miR-223) and found that this miRNA was highly elevated in hepatocytes in HFD-fed mice and in human NASH samples. Genetic deletion of miR-223 induced a full spectrum of NAFLD in long-term HFD-fed mice including steatosis, inflammation, fibrosis, and HCC. Furthermore, microarray analyses revealed that, compared to wild-type mice, HFD-fed miR-223 knockout (miR-223KO) mice had greater hepatic expression of many inflammatory genes and cancer-related genes, including (C-X-C motif) chemokine 10 (Cxcl10) and transcriptional coactivator with PDZ-binding motif (Taz), two well-known factors that promote NASH development. In vitro experiments demonstrated that Cxcl10 and Taz are two downstream targets of miR-223 and that overexpression of miR-223 reduced their expression in cultured hepatocytes. Hepatic levels of miR-223, CXCL10, and TAZ mRNA were elevated in human NASH samples, which positively correlated with hepatic levels of several miR-223 targeted genes as well as several proinflammatory, cancer-related, and fibrogenic genes. Conclusion: HFD-fed miR-223KO mice develop a full spectrum of NAFLD, representing a clinically relevant mouse NAFLD model; miR-223 plays a key role in controlling steatosis-to-NASH progression by inhibiting hepatic Cxcl10 and Taz expression and may be a therapeutic target for the treatment of NASH.