Fatty liver is highly sensitive to inflammatory activation. Peroxisome proliferator-activated receptors (PPAR) have anti-inflammatory effects and regulate lipid metabolism in the fatty liver. We hypothesized that fatty liver leads to endotoxin sensitivity through an imbalance between pro- and anti-inflammatory signals. Leptin-deficient, ob/ob mice and their lean littermates were challenged with single or double insults and pro- and anti-inflammatory pathways were tested on cytokine production and activation of nuclear regulatory factors NF-kappaB and peroxisome proliferator receptor element (PPRE). Ob/ob mice produced significantly higher serum tumor necrosis factor alpha (TNF-alpha) and interleukin (IL) 6 and showed increased hepatic NF-kappaB activation compared to lean littermates after stimulation with a single dose of lipopolysaccharide (LPS) or alcohol. In ob/ob mice, double insults with alcohol and LPS augmented proinflammatory responses mediated by increased degradation of inhibitory kappaB (IkappaB)-alpha and IkappaB-beta and preferential induction of the p65/p50 NF-kappaB heterodimer. In lean mice, in contrast, acute alcohol attenuated LPS-induced TNF-alpha, IL-6 production, and NF-kappaB activation through reduced IkappaB-alpha degradation and induction of p50/p50 homodimers. PPRE binding was increased in fatty but not in lean livers after alcohol or LPS stimulation. However, cotreatment with alcohol and LPS reduced both PPRE binding and nuclear levels of PPAR-alpha in fatty livers but increased those in lean livers. In conclusion, our results show opposite PPRE and NF-kappaB activation in fatty and lean livers. PPAR activation may represent an anti-inflammatory mechanism that fails in the fatty liver on increased proinflammatory pressure. Thus, an imbalance between PPAR-mediated anti-inflammatory and NF-kappaB-mediated proinflammatory signals may contribute to increased inflammation in the fatty liver.