Background Autoimmune hepatitis (AIH) is characterised by death of hepatocytes and chronic inflammation. Patients with deleterious variants in A20 are identified with AIH presentations and immune activation. However, it remains unclear how A20 dysregulation contributes to AIH pathogenesis. Objective This study elucidates the role and mechanism of A20 in AIH progression and its therapeutic potential. Design A20 expression was analysed in patient sample and AIH mouse model. A20 function was explored in mice with hepatocyte-specific A20 knockout and overactivation and wild type controls. Liver samples were assessed by histology, immunoblot and electron microscopy. Proteomics, mass spectrometry, co-immunoprecipitation and site‐specific mutation experiments were used to elucidate underlying mechanisms. AdipoRon was used to identify the effects of pharmacological induction of A20 on AIH. Results A20 expression is reduced in livers of individuals with AIH. In experimental AIH, hepatocyte-specific A20 depletion aggravates hepatic inflammation and fibrosis, enhances ferroptosis of hepatocytes and increases sensitivity to ferroptosis inhibitors, while A20 overexpression ameliorates AIH pathology and reduces hepatocyte ferroptosis. Mechanistically, A20 is found to interact with KEAP1 and mediate its K48-linked polyubiquitination degradation, promoting NRF2 accumulation and nuclear translocation to enhance antioxidant and antiferroptosis effects. Pharmacological induction of A20 confers protective effects in AIH. The clinical correlation among A20, KEAP1, NRF2 and ferroptosis is validated in human AIH samples. Conclusions Our findings elucidate a previously unrecognised A20-KEAP1-NRF2 axis that orchestrates hepatocyte ferroptosis in AIH. Targeting A20 may provide a promising therapeutic strategy for AIH.