Acute hepatic injury caused by inflammatory liver disease is associated with high mortality. This study examined the role of caveolin‐1 (Cav‐1) in lipopolysaccharide (LPS) and D‐galactosamine (GalN)‐induced fulminant hepatic injury in wild type and Cav‐1‐null (Cav‐1^−/−) mice. Hepatic Cav‐1 expression was induced post‐LPS/GalN treatment in wild‐type mice. LPS/GalN‐treated Cav‐1^−/− mice showed reduced lethality and markedly attenuated liver damage, neutrophil infiltration and hepatocyte apoptosis as compared to wild‐type mice. Cav‐1 deletion significantly reduced LPS/GalN‐induced caspase‐3, caspase‐8 and caspase‐9 activation and pro‐inflammatory cytokine and chemokine expression. Additionally, Cav‐1^−/− mice showed suppressed expression of Toll‐like receptor 4 (TLR4) and CD14 in Kupffer cells and reduced expression of vascular cell adhesion molecule 1 and intercellular adhesion molecule 1 in liver cells. Cav‐1 deletion impeded LPS/GalN‐induced inducible nitric oxide synthase expression and nitric oxide production and hindered nuclear factor‐κB (NF‐κB) activation. Taken together, Cav‐1 regulated the expression of mediators that govern LPS‐induced inflammatory signalling in mouse liver. Thus, deletion of Cav‐1 suppressed the inflammatory response mediated by the LPS‐CD14‐TLR4‐NF‐κb pathway and alleviated acute liver injury in mice.