Steatosis--accumulation of triacylglycerol in hepatocytes--is a common finding in liver biopsy specimens. The commonest form is macrovesicular change, which occurs in response to a wide range of insults. In the absence of other features, the pathologist cannot ascertain the likely cause on morphological features alone but can give an indication of the severity of steatosis. Close clinicopathological correlation is required to establish the cause. In most instances, macrovesicular steatosis is at least potentially reversible. Although it may be thought of as a benign condition, it may be associated with the development of necroinflammation and fibrosis--so-called steatohepatitis. The classic example of this is alcoholic hepatitis, but there is increasing awareness of steatohepatitis occurring in nonalcoholics: NASH. Distinction between alcoholic hepatitis and NASH on purely histological grounds may be impossible; careful clinicopathological discussion is mandatory. Microvesicular steatosis is generally a more severe disease than the macrovesicular form and is seen in a variety of conditions in which there is either an inherited or an acquired defect in beta-oxidation of fatty acids; the former includes mitochondrial cytopathies and disorders of ureagenesis, and the latter includes acute fatty liver of pregnancy and Reye's syndrome. This review describes the morphological features of steatosis and steatohepatitis, considers their pathogenesis, and outlines the clinical significance of the different patterns of injury.