© 2020 The Authors There is an increasing need to explore the mechanism of the progression of non-alcoholic fatty liver disease. Steroid metabolism is closely linked to hepatic steatosis and steroids are excreted as bile acids (BAs). Here, we demonstrated that feeding WKAH/HkmSlc inbred rats a diet supplemented with cholic acid (CA) at 0.5 g/kg for 13 weeks induced simple steatosis without obesity. Liver triglyceride and cholesterol levels were increased accompanied by mild elevation of aminotransferase activities. There were no signs of inflammation, insulin resistance, oxidative stress, or fibrosis. CA supplementation increased levels of CA and taurocholic acid (TCA) in enterohepatic circulation and deoxycholic acid (DCA) levels in cecum with an increased ratio of 12α-hydroxylated BAs to non-12α-hydroxylated BAs. Analyses of hepatic gene expression revealed no apparent feedback control of BA and cholesterol biosynthesis. CA feeding induced dysbiosis in cecal microbiota with enrichment of DCA producers, which underlines the increased cecal DCA levels. The mechanism of steatosis was increased expression of Srebp1 (positive regulator of liver lipogenesis) through activation of the liver X receptor by increased oxysterols in the CA-fed rats, especially 4β-hydroxycholesterol (4βOH) formed by upregulated expression of hepatic Cyp3a2, responsible for 4βOH formation. Multiple regression analyses identified portal TCA and cecal DCA as positive predictors for liver 4βOH levels. The possible mechanisms linking these predictors and upregulated expression of Cyp3a2 are discussed. Overall, our observations highlight the role of 12α-hydroxylated BAs in triggering liver lipogenesis and allow us to explore the mechanisms of hepatic steatosis onset, focusing on cholesterol and BA metabolism.