Fatty liver disease (FLD) is a growing health issue with burdening unmet clinical needs. FLD has a genetic component but, despite the common variants already identified, there is still a missing heritability component. Using a candidate gene approach, we identify a locus (rs71519934) at the Pleckstrin and Sec7 domain-containing 3 (PSD3) gene resulting in a leucine to threonine substitution at position 186 of the protein (L186T) that reduces susceptibility to the entire spectrum of FLD in individuals at risk. PSD3 downregulation by short interfering RNA reduces intracellular lipid content in primary human hepatocytes cultured in two and three dimensions, and in human and rodent hepatoma cells. Consistent with this, Psd3 downregulation by antisense oligonucleotides in vivo protects against FLD in mice fed a non-alcoholic steatohepatitis-inducing diet. Thus, translating these results to humans, PSD3 downregulation might be a future therapeutic option for treating FLD.