Abstract Hepatocellular carcinoma (HCC) is a major cause of cancer‐related death worldwide. Despite the proven efficacy of immunotherapy against malignancies, a large proportion of patients with HCC fail to benefit from these efficacious agents because of their overwhelmingly immunosuppressive microenvironment. Therefore, there is an urgent need to identify key genes and develop effective strategies for reshaping the HCC microenvironment. Here, a significant downregulation of C‐X‐C motif chemokine ligand 2 (CXCL2) in HCC is identified due to gene copy number loss, which correlates with poor prognosis and suboptimal responsiveness to immunotherapy. Subsequently, it is found that CXCL2 can not only recruit neutrophils as expected, but also induce their polarization toward the antitumor type to curb HCC progression. Mechanistically, differing from the prevailing notion that CXCL2 primarily functions extracellularly as a chemokine, it is demonstrated that intracellular CXCL2 can bind to Y‐Box Binding Protein 1 (YBX1) and prevent its nuclear translocation. Consequently, this reduces the transcription of sterol regulatory element binding transcription factor 2 (SREBF2) and suppresses cholesterol biosynthesis, thereby remodeling HCC microenvironment and impeding HCC development. In summary, this study highlights the unconventional role of CXCL2 in regulating neutrophil polarization and immune responses in HCC, positioning it as a potential therapeutic target for HCC.