The clinical effectiveness of Zidovudine (AZT) is constrained due to its side-effects including hepatic steatosis and toxicity. However, the mechanism(s) of hepatic lipid accumulation in AZT-treated individuals is unknown. We hypothesized that AZT-mediated oxidative and endoplasmic reticulum (ER) stress may play a role in the AZT-induced hepatic lipid accumulation. AZT treatment of C57BL/6J female mice (400 mg/day/kg body weight, i.p.) for 10 consecutive days significantly increased hepatic triglyceride levels and inflammation. Markers of oxidative stress such as protein oxidation, nitration, glycation and lipid peroxidation were significantly higher in the AZT-treated mice compared to vehicle controls. Further, the levels of ER stress marker proteins like GRP78, p-PERK, and p-eIF2 alpha were significantly elevated in AZT-treated mice. The level of nuclear SREBP-1c, a transcription factor involved in fat synthesis, was increased while significantly decreased protein levels of phospho-acetyl-CoA carboxylase, phospho-AMP kinase and PPAR alpha as well as inactivation of 3-keto-acyl-CoA thiolase in the mitochondrial fatty acid beta-oxidation pathway were observed in AZT-exposed mice compared to those in control animals. Collectively, these data suggest that elevated oxidative and ER stress plays a key role, at least partially, in lipid accumulation, inflammation and hepatotoxicity in AZT-treated mice.