As a common chronic metabolic disease, the development of diabetes mellitus (DM) may also be accompanied by liver damage and inflammatory disorders. Sitagliptin is an inhibitor of dipeptidyl peptidase-4 (DPP4, also known as CD26), which is clinically used for DM treatment. However, the mechanism of sitagliptin's efficiency in liver diseases is largely unknown. In this study, mice suffering from streptozotocin (STZ) exhibit elevated liver DPP4 expression and activity, as well as inflammatory and chronic liver injury phenotype, whereas specifically inhibiting the activity of DPP4 in mouse liver tissues and hepatocytes by sitagliptin contributes to decreased cytokines, oxidative stress, cell apoptosis, and inflammation in STZ-induced diabetic mice. Moreover, sitagliptin reduced TNFα or LPS-induced cellular reactive oxygen species (ROS) level, cell apoptosis, and protein expression in the NFκB signaling pathway in HepG2 cells or primary mouse hepatocytes. Altogether, our study confirms that sitagliptin may protect liver tissue by alleviating ROS production and NFκB signaling activation, providing a putative mechanism for preventing the development of diabetic liver disease.