Proinflammatory activation of hepatic macrophages plays a key role in the development of nonalcoholic steatohepatitis (NASH). This involves increased embryonic hepatic Kupffer cell (KC) death, facilitating the placement of KCs with bone marrow-derived recruited hepatic macrophages (RHMs) that highly express proinflammatory genes. Moreover, phago/efferocytic activity of KCs is diminished in NASH, enhancing liver inflammation. However, the molecular mechanisms underlying these changes in KCs are not known. Here, we show that HIF-2a mediates NASH-associated decreased KC growth and efferocytosis by enhancing lysosomal stress. At the molecular level, HIF-2a stimulated mTOR and ERK-dependent inhibitory TFEB phosphorylation, leading to decreased lysosomal and phagocytic gene expression. With increased metabolic stress and phago/efferocytic burden in NASH, these changes were sufficient to increase lysosomal stress, causing decreased efferocytosis and lysosomal cell death. Of interest, HIF-2a-dependent TFEB regulation only occurred in KCs, but not in RHMs. Instead, in RHMs, HIF-2a promoted mtROS production and proinflammatory activation by increasing ANT2 expression and mitochondrial permeability transition. Taken together, our results suggest that macrophage subtype-specific effects of HIF-2a collectively contributes to the proinflammatory activation of liver macrophages, leading to the development of NASH.