Accumulation of hydrophobic bile acids in the liver contributes to cholestatic liver injury. Inflammation induced by excessive bile acids is believed to play a crucial role, however, the mechanisms of bile acids triggered inflammatory response remain unclear. Recent studies have highlighted the effect of NLRP3 inflammasome in mediating liver inflammation and fibrosis. In this study, we for the first time showed that chenodeoxycholic acid (CDCA), the major hydrophobic primary bile acid involved in cholestatic liver injury, could dose-dependently induce NLRP3 inflammasome activation and secretion of pro-inflammatory cytokine-IL-1 beta in macrophages by promoting ROS production and K+ efflux. Mechanistically, CDCA triggered ROS formation in part through TGR5/EGFR downstream signaling, including protein kinase B, extracellular regulated protein kinases and c-Jun N-terminal kinase pathways. Meanwhile, CDCA also induced ATP release from macrophages which subsequently causes K+ efflux via P2X7 receptor. Furthermore, in vivo inhibition of NLRP3 inflammasome with caspase-1 inhibitor dramatically decreased mature IL-1 beta level of liver tissue and ameliorated liver fibrosis in bile duct ligation (BDL) mouse model. In conclusion, excessive CDCA may represent an endogenous danger signal to activate NLRP3 inflammasome and initiate liver inflammation during cholestasis. Our finding offers a mechanistic basis to ameliorate cholestatic liver fibrosis by targeting inflammasome activation.