Immune-mediated liver diseases including autoimmune and viral hepatitis are a major health problem worldwide. In this study, we report that activation of the farnesoid X receptor (FXR), a member of the ligand-activated nuclear receptor superfamily and bile sensor highly expressed in the liver, attenuates liver injury in a model of autoimmune hepatitis induced by Con A. We found that FXR gene ablation results in a time-dependent increase of liver expression (up to 20-fold in a 9-mo-old mouse) of osteopontin, a NKT cell-derived extracellular matrix protein and immunoregulatory cytokine. In comparison to wild-type, FXR(-/-) mice are more susceptible to Con A-induced hepatitis and react to Con A administration by an unregulated production of osteopontin. Administering wild-type mice with a synthetic FXR agonist attenuated Con A-induced liver damage and liver expression of the osteopontin gene. By in vitro studies, we found that FXR is expressed by primarily isolated NKT cells and its ablation favors ostepontin production in response to Con A. Chromatin immunoprecipitation assay and coimmunoprecipitation experiments demonstrate that the short heterodimer partner (SHP), a nuclear receptor and FXR target, was expressed by NKT cell hybridomas and increased in response to FXR activation. FXR activates SHP that interacts with and inhibits c-Jun binding to the osteopontin promoter. These data indicate that in NKT cells, FXR activation causes a SHP-mediated inhibition of osteopontin production. These data support the notion that the bile acid sensor FXR regulates the activation of liver NKT cells.