Large Vision-Language Models (LVLMs) have achieved remarkable success but continue to struggle with object hallucination (OH), generating outputs inconsistent with visual inputs. While previous work has proposed methods to reduce OH, the visual decision-making mechanisms that lead to hallucinations remain poorly understood. In this paper, we propose VaLSe, a Vision-aware Latent Steering framework that adopts an interpretation-then-mitigation strategy to address OH in LVLMs. By tackling dual challenges of modeling complex vision-language interactions and eliminating spurious activation artifacts, VaLSe can generate visual contribution maps that trace how specific visual inputs influence individual output tokens. These maps reveal the model's vision-aware focus regions, which are then used to perform latent space steering, realigning internal representations toward semantically relevant content and reducing hallucinated outputs. Extensive experiments demonstrate that VaLSe is a powerful interpretability tool and an effective method for enhancing model robustness against OH across multiple benchmarks. Furthermore, our analysis uncovers limitations in existing OH evaluation metrics, underscoring the need for more nuanced, interpretable, and visually grounded OH benchmarks in future work. Code is available at: https://github.com/Ziwei-Zheng/VaLSe.