The complexity of liver tumorigenesis is underscored by the recently observed anti-oncogenic effects of oncoproteins, although the mechanisms are unclear. Shp2/Ptpn11 is a proto-oncogene in hematopoietic cells and antagonizes the effect of tumor suppressor Pten in leukemogenesis. In contrast, we show here cooperative functions of Shp2 and Pten in suppressing hepatocarcinogenesis. Ablating both Shp2 and Pten in hepatocytes induced early-onset non-alcoholic steatohepatitis (NASH) and promoted genesis of liver tumor-initiating cells likely due to augmented cJun expression/activation and elevated ROS and inflammation in the hepatic microenvironment. Inhibiting cJun partially suppressed NASH-driven liver tumorigenesis without improving NASH. SHP2 and PTEN deficiencies were detected in liver cancer patients with poor prognosis. These data depict a mechanism of hepato-oncogenesis and suggest a potential therapeutic strategy.