Abstract Body: Prediabetes associates with hepatic steatosis, increased plasma triglyceride-rich lipoproteins (TRLs), and cardiovascular disease (CVD). Hepatic steatosis is linked to increased plasma levels of soluble TREM2 (sTREM2), the shed domain of TREM2. TREM2 is a macrophage receptor mediating lipid uptake and efferocytosis. The goal of this study is to investigate if there is a mechanistic link between full-length TREM2 and apolipoprotein C3 (APOC3), an apolipoprotein that slows TRL catabolism and promotes CVD. We performed complementary analyses of individuals with prediabetes and hepatic steatosis, mouse models, and hepatocyte-macrophage co-cultures. Individuals with prediabetes and hepatic steatosis had higher plasma sTREM2, APOC3, and TRLs than healthy controls matched for age, sex, and BMI (p=1.20x10^-2, 1.67x10^-3, and 1.76x10^-2; n=10/group). Moreover, plasma sTREM2 correlated positively with plasma APOC3 in a larger cohort of subjects with metabolic dysfunction-associated steatotic liver disease (r²=0.28; p=5.29x10^-3; n=26). LDL receptor-deficient (Ldlr^-/-) mice - which, when fed a high-fat high-sucrose diet with added cholesterol develop prediabetes, hepatic steatosis, and atherosclerosis - were used to study the mechanistic link between full-length TREM2 and APOC3 by introducing complete bone marrow engraftment from wildtype (WT) mice, mice deficient in myeloid cell ADAM17 (the main TREM2 sheddase), mice deficient in TREM2, or mice deficient in both myeloid ADAM17 and TREM2. Primary hepatocyte-macrophage co-culture studies revealed that myeloid cell ADAM17-deletion preserved macrophage full-length TREM2, prevented APOC3 secretion from lipid-loaded hepatocytes, and increased efferocytosis of steatotic hepatocytes compared with TREM2-deficient macrophages. In mice with prediabetes and hepatic steatosis, preserving macrophage full-length TREM2 by myeloid-targeted ADAM17-deletion protected against the elevated plasma APOC3, sTREM2, TRLs, and atherosclerosis, while TREM2-deficiency increased APOC3 secretion rate and atherosclerosis, and deficiency in both myeloid ADAM17 and TREM2 resulted in APOC3 levels and atherosclerosis similar to WT mice (all p<0.05, n=8-9/group). Our findings identify macrophage TREM2 shedding as an upstream driver of hepatic APOC3 overproduction, providing a mechanistic link between hepatic steatosis and CVD risk in prediabetes.