The prevalence of obesity has reached epidemic proportions in most of the western world. Current estimates suggest that 22.5%of the population of the United States suffers from obesity and is at risk for development of obesity-related complications, including hypertension, coronary artery disease, diabetes, hyperlipidemia,increased predisposition for various cancers, and nonalcoholic fatty liver disease. Fatty liver disease is currently the most common abnormality observed in hepatology practice. Since it was first reported in the 1980s in obese diabetic females, our understanding of nonalcoholic fatty liver (NAFL) and nonalcoholic steatohepatitis (NASH) has undergone significant metamorphosis. It is now universally accepted that insulin resistance and subsequent hyperinsulinemia are key factors that lead to both NAFL and NASH.This article reviews the role of insulin resistance in the genesis of these conditions.