Reactive oxygen species (ROS) contribute to the development of non-alcoholic fatty liver disease. ROS generation by infiltrating macrophages involves multiple mechanisms, including Toll-like receptor 4 (TLR4)-mediated NADPH oxidase (NOX) activation. Here, we show that palmitate-stimulated CD11b+F4/80low hepatic infiltrating macrophages, but not CD11b+F4/80high Kupffer cells, generate ROS via dynamin-mediated endocytosis of TLR4 and NOX2, independently from MyD88 and TRIF. We demonstrate that differently from LPS-mediated dimerization of the TLR4–MD2 complex, palmitate binds a monomeric TLR4–MD2 complex that triggers endocytosis, ROS generation and increases pro-interleukin-1β expression in macrophages. Palmitate-induced ROS generation in human CD68lowCD14high macrophages is strongly suppressed by inhibition of dynamin. Furthermore, Nox2-deficient mice are protected against high-fat diet-induced hepatic steatosis and insulin resistance. Therefore, endocytosis of TLR4 and NOX2 into macrophages might be a novel therapeutic target for non-alcoholic fatty liver disease.