Dysregulated autophagy is associated with steatosis and non-alcoholic fatty liver disease (NAFLD), however the mechanisms connecting them remain poorly understand. Here, we show that co-administration of lovastatin and ezetimibe (L/E) significantly reverses hepatic triglyceride accumulation concomitant with an increase in SREBP-2 driven autophagy in mice fed a high-fat diet (HFD). We further show that the statin mediated increase in SREBP-2 directly activates expression of patatin-like phospholipase domain-containing enzyme 8 (PNPLA8) gene, and PNPLA8 associates with autophagosomes and is associated with a decrease in cellular triglyceride. Moreover, we show that over-expression of PNPLA8 dramatically decreases hepatic steatosis through increased autophagy in hepatocytes of HFD-fed mice. Live-cell imaging analyses also reveal that PNPLA8 dynamically interacts with LC3 and we suggest that the SREBP-2/PNPLA8 axis represents a novel regulatory mechanism for lipid homeostasis. These data provide a possible mechanism for the reported beneficial effects of statins for decreasing hepatic triglyceride levels in NAFLD patients.