Nonalcoholic fatty liver disease (NAFLD) is characterized by the accumulation of lipid droplets in hepatocytes. NAFLD development and progression is associated with an increase in hepatic cholesterol levels and decreased autophagy and lipophagy flux. Previous studies have shown that the expression of lysosomal acid lipase (LAL), encoded by the gene LIPA, which can hydrolyze both triglyceride and cholesteryl esters, is inversely correlated with the severity of NAFLD. In addition, ablation of LAL activity results in profound NAFLD. Based on this, we predicted that overexpressing LIPA in the livers of mice fed a Western diet would prevent the development of NAFLD. As expected, mice fed the Western diet exhibited numerous markers of NAFLD, including hepatomegaly, lipid accumulation, and inflammation. Unexpectedly, LAL overexpression did not attenuate steatosis and had only minor effects on neutral lipid composition. However, LAL overexpression exacerbated inflammatory gene expression and infiltration of immune cells in mice fed the Western diet. LAL overexpression also resulted in abnormal phagosome accumulation and lysosomal lipid accumulation depending upon the dietary treatment. Overall, we found that hepatic overexpression of LAL drove immune cell infiltration and inflammation and did not attenuate the development of NAFLD, suggesting that targeting LAL expression may not be a viable route to treat NAFLD in humans.