BACKGROUND & AIMS: Previous single-cell RNA-sequencing analyses have shown that Trem2-expressing macrophages are present in the liver during obesity, non-alcoholic steatohepatitis (NASH) and cirrhosis. Herein, we aimed to functionally characterize the role of bone marrow-derived TREM2-expressing macrophage populations in NASH. METHODS: We used bulk RNA sequencing to assess the hepatic molecular response to lipid-dependent dietary intervention in mice. Spatial mapping, bone marrow transplantation in two complementary murine models and single-cell sequencing were applied to functionally characterize the role of TREM2 macrophage populations in NASH. RESULTS: We found that the hepatic transcriptomic profile during steatohepatitis mirrors the dynamics of recruited bone marrow-derived monocytes that already acquire increased expression of Trem2 in the circulation. Increased Trem2 expression was reflected by elevated levels of systemic soluble TREM2 in mice and humans with NASH. In addition, soluble TREM2 levels were superior to traditionally used laboratory parameters for distinguishing between different fatty liver disease stages in two separate clinical cohorts. Spatial transcriptomics revealed that TREM2 macrophages localize to sites of hepatocellular damage, inflammation and fibrosis in the steatotic liver. Finally, using multiple murine models and in vitro experiments, we demonstrate that hematopoietic Trem2 deficiency causes defective lipid handling and extracellular matrix remodeling, resulting in exacerbated steatohepatitis, cell death and fibrosis. CONCLUSIONS: Our study highlights the functional properties of bone marrow-derived TREM2 macrophages and implies the clinical relevance of systemic soluble TREM2 levels in the context of NASH. LAY SUMMARY: Our study defines the origin and function of macrophages (a type of immune cell) that are present in the liver and express a specific protein called TREM2. We find that these cells have an important role in protecting against non-alcoholic steatohepatitis (a progressive form of fatty liver disease). We also show that the levels of soluble TREM2 in the blood could serve as a circulating marker of non-alcoholic fatty liver disease.