Hepatocellular carcinoma (HCC) is the 3rd most deadly malignancy. Activated hepatic stellate cells (aHSC) give rise to cancer-associated fibroblasts in HCC and are considered a potential therapeutic target. Here we report that selective ablation of stearoyl CoA desaturase-2 (Scd2) in aHSC globally suppresses nuclear CTNNB1 and YAP1 in tumors and tumor microenvironment and prevents liver tumorigenesis in male mice. Tumor suppression is associated with reduced leukotriene B4 receptor 2 (LTB4R2) and its high affinity oxylipin ligand, 12-hydroxyheptadecatrienoic acid (12-HHTrE). Genetic or pharmacological inhibition of LTB4R2 recapitulates CTNNB1 and YAP1 inactivation and tumor suppression in culture and in vivo. Single cell RNA sequencing identifies a subset of tumor-associated aHSC expressing Cyp1b1 but no other 12-HHTrE biosynthetic genes. aHSC release 12-HHTrE in a manner dependent on SCD and CYP1B1 and their conditioned medium reproduces the LTB4R2-mediated tumor-promoting effects of 12-HHTrE in HCC cells. CYP1B1-expressing aHSC are detected in proximity of LTB4R2-positive HCC cells and the growth of patient HCC organoids is blunted by LTB4R2 antagonism or knockdown. Collectively, our findings suggest aHSC-initiated 12-HHTrE-LTB4R2-CTNNB1-YAP1 pathway as a potential HCC therapeutic target.