Non-alcoholic fatty liver disease (NAFLD) is difficult to manage due to the lack of effective treatments. Increased oxygen consumption caused by overnutrition, along with reduced oxygen delivery to liver cells induces hepatic steatosis. Here, we investigated the efficacy of oxygen therapy (OT) to alleviate hepatic steatosis. The effect of OT on hepatic steatosis was evaluated in high-fat-diet (HFD)-fed mice and palmitic acid (PA)-treated primary hepatocytes. Liver biopsy tissue samples were used to determine the relationship between the expression of hypoxia-inducible factor-2α (HIF-2α) and the progression of NAFLD. The role of HIF-2α in the OT group was determined based on the overexpression of HIF-2α in vitro. OT safely alleviated hepatic hypoxia and improved hepatic steatosis by inhibiting hepatic de novo lipogenesis in HFD-fed mice and PA-treated primary hepatocytes, and this was accompanied by reduced expression of HIF-2α and hepatic de novo lipogenesis. The analysis of liver tissues from individuals with or without NAFLD revealed a positive correlation between hepatic HIF-2α expression and NAFLD progression. Overexpression of HIF-2α in vitro inhibited the beneficial effect of OT against hepatic lipogenesis and steatosis. OT might be a viable treatment option for NAFLD and functions by alleviating hypoxia and inhibiting the liver HIF-2α signaling pathway.