Secreted protein acidic and rich in cysteine (SPARC) is known to play a previously unappreciated role in diabetes, but its precise mechanism in liver/hepatocyte pathology remains unknown. Inhibition of SPARC is critical in resolving candidate pathogenic events such as production of reactive oxygen species (ROS), which are broadly considered for their roles in diabetes, and is capable of protecting functional hepatocytes. Here, we provide in vitro and in vivo evidence demonstrating pathological correlations between SPARC and streptozotocin (STZ)-induced diabetic rat livers as well as cultured hepatocytes induced by diabetogenic stimuli. Under these conditions, transient SPARC silencing was carried out to investigate the role of SPARC in the pathogenesis of pro-diabetic hepatocyte damage and dysfunction. The constitutive expression of SPARC in hepatocytes was up-regulated under a diabetic environment. In addition, Nox4-dependent superoxide generation contributed to increased expression of SPARC, and this was inhibited by tiron and pharmacological or genetic inactivation of Nox4-containing NADPH oxidase. Remarkably, SPARC deficiency inhibited diabetic stimuli-induced elevation of superoxide production and resolved salient features of hepatocyte damage such as impaired cytoprotection, inflammation, apoptosis, and autophagy. At the same time, links between SPARC, integrin-β1, Nox4-derived superoxide, and JNK signaling provide a basis for these phenotypes. Taken together with the observations that SPARC deficiency had protective effects on hepatocytes via a favorable inhibition profile, functional knowledge of SPARC may offer a unique therapeutic approach to preserve hepatocellular fate decisions in diabetes.