Troglitazone is currently approved for the treatment of diabetes mellitus. Hepatic abnormalities have been reported in up to 1.9% of patients receiving the drug. Severe hepatotoxicity, including the need for liver transplantation, has also been reported in patients treated with troglitazone. Troglitazone has been reported to be beneficial in a small group of patients with nonalcoholic steatohepatitis (NASH). We present a patient with nonalcoholic steatohepatitis and diabetes mellitus who developed severe cholestasis after treatment with troglitazone. The exact mechanism of troglitazone toxicity is unknown, and whether preexisting liver abnormalities increase the incidence of toxicity is speculative. Further data are needed before more widespread use of troglitazone can be recommended for patients with nonalcoholic steatohepatitis.