Fatty liver is a relatively common incidental finding on imaging studies. Although generally a benign condition, fat in the liver can be troubling for clinicians because it can cause persistently elevated liver enzyme levels. The finding of fatty liver may also indicate the presence of nonalcoholic steatohepatitis (NASH). NASH is a histologic diagnosis applied to a constellation of liver biopsy findings that appear similar to alcoholic liver disease but are found in the absence of alcohol abuse. NASH is typically identified during the evaluation of elevated aminotransferase levels after exclusion of viral, metabolic, and other causes of liver disease. Obesity is a major risk factor; the role of diabetes is less certain, although evidence is accumulating that hyperinsulinism may play an important pathophysiologic role. About 15% to 40% of NASH patients develop hepatic fibrosis, a precursor to cirrhosis. Exactly how many patients with NASH progress to cirrhosis is unknown, but 1% to 2% of liver transplants are now performed because of a pretransplant diagnosis of NASH. Specific and effective treatments are needed but until the pathogenesis of this common liver disease is better understood, weight loss will remain the mainstay of treatment for obese patients.