Lecithin cholesterol acyltransferase (LCAT) plays a pivotal role in acyl-esterifying cholesterol intravascularly, but its function in metabolic dysfunction-associated steatotic liver disease (MASLD) or steatohepatitis (MASH) has remained uncertain both in murine models and humans for decades, which is largely attributable to the distinct differences in cholesterol metabolism between mice and humans. Previously, we created a novel golden Syrian hamster model deficient in LCAT activity. Herein, we explored the influence of LCAT on the development of MASLD and MASH. A cross-sectional clinical study of LCAT activity and free cholesterol (FC) levels in healthy and MASLD patients was performed. LCAT knockout (LCAT KO) hamsters were used to explore the characteristics of cholesterol homeostasis and MASLD and MASH development. Lipidomics, mRNA-seq, and qPCR were employed to investigate the underlying mechanisms involved. MASLD patients displayed reduced LCAT activity, elevated FC levels, and ratio of FC/TC. Serum FC levels were positively correlated with triglyceride (TG), total cholesterol (TC), and apoB100 levels. In hamsters, LCAT deficiency resulted in increased FC levels and decreased high-density lipoprotein levels. Apolipoprotein profiles revealed increased ApoB100/48 and apoE but decreased apoAI. Increases in serum FC levels were primarily observed in LCAT-deficient hamster. Interestingly, LCAT KO hamsters presented mild TG species deposition in the liver even when fed a chow diet indicated by lipidomics. These increased TG species included TG (16:0/18:1/18:2), TG (16:0/18:1/18:3), and TG (16:0/16:1/18:1). On a high-fat and high-cholesterol diet, LCAT-deficient hamsters developed severe liver ballooning, inflammation, and fibrosis. Using HepG2 cells and primary hepatocytes confirmed that FC increased intracellular lipogenesis and promoted inflammatory response, which was reversed by a NLRP3 inhibitor. In summary, LCAT deficiency in hamsters promotes liver lipid deposition and MASH progression, thus highlighting the therapeutic role of LCAT in MASLD and MASH.