Type 2 diabetes and cardiovascular disease represent a serious threat to the health of the population worldwide. Although overall adiposity and particularly visceral adiposity are established risk factors for these diseases, in the recent years fatty liver emerged as an additional and independent factor. However, the pathophysiology of fat accumulation in the liver and the cross-talk of fatty liver with other tissues involved in metabolism in humans are not fully understood. Here we discuss the mechanisms involved in the pathogenesis of hepatic fat accumulation, particularly the roles of body fat distribution, nutrition, exercise, genetics, and gene-environment interaction. Furthermore, the effects of fatty liver on glucose and lipid metabolism, specifically via induction of subclinical inflammation and secretion of humoral factors, are highlighted. Finally, new aspects regarding the dissociation of fatty liver and insulin resistance are addressed.