Nonalcoholic fatty liver disease (NAFLD) is the most common liver disease, and is associated with the development of metabolic syndrome. Postmenopausal women with estrogen deficiency are at a higher risk of progression to NAFLD. Estrogen has a protective effect against the progression of the disease. Currently, there are no safe and effective treatments for these liver diseases in postmenopausal women. Honokiol (Ho), a bioactive natural product derived from Magnolia spp, has anti-inflammatory, anti-angiogenic, and anti-oxidative properties. In our study, we investigated the beneficial effects of Ho on NAFLD in ovariectomized (OVX) mice. We divided the mice into four groups, as follows: SHAM, OVX, OVX+β-estradiol (0.4 mg/kg of bodyweight), and OVX+Ho (50 mg/kg of diet). Mice were fed diets with/without Ho for 12 weeks. The bodyweight, epidermal fat, and weights of liver tissue were lower in the OVX group than in the other groups. Ho improved hepatic steatosis and reduced proinflammatory cytokine levels. Moreover, Ho markedly downregulated plasma lipid levels. Our results indicate that Ho ameliorated OVX-induced fatty liver and inflammation, as well as associated lipid metabolism. These findings suggest that Ho may be hepatoprotective against NAFLD in postmenopausal women.