Surgical liver failure (SLF) develops when a marginal amount of hepatic mass is left after surgery, such as following excessive resection. SLF is the commonest cause of death due to liver surgery; however, its etiology remains obscure. Using mouse models of standard hepatectomy (sHx) (68%, resulting in full regeneration) or extended hepatectomy (eHx) (86%/91%, causing SLF), we explored the causes of early SLF related to portal hyperafflux. Assessing the levels of HIF2A with or without oxygenating agent inositol trispyrophosphate (ITPP) indicated hypoxia early after eHx. Subsequently, lipid oxidation (PPARA/PGC1α) was downregulated and associated with persisting steatosis. Mild oxidation with low-dose ITPP reduced the levels of HIF2A, restored downstream PPARA/PGC1α expression along with lipid oxidation activities (LOAs), and normalized steatosis and other metabolic or regenerative SLF deficiencies. Promotion of LOA with L-carnitine likewise normalized the SLF phenotype, and both ITPP and L-carnitine markedly raised survival in lethal SLF. In patients who underwent hepatectomy, pronounced increases in serum carnitine levels (reflecting LOA) were associated with better recovery. Lipid oxidation thus provides a link between the hyperafflux of O₂-poor portal blood, the metabolic/regenerative deficits, and the increased mortality typifying SLF. Stimulation of lipid oxidation-the prime regenerative energy source-particularly through L-carnitine may offer a safe and feasible way to reduce SLF risks in the clinic.