Non-alcoholic fatty liver disease (NAFLD) is now recognised as the hepatic component of metabolic syndrome (MetS). NAFLD is an example of ectopic fat accumulation in a visceral organ that causes organ-specific disease, and affects risk of other related diseases such as type 2 diabetes and CVD. NAFLD is a spectrum of fat-associated liver conditions that can culminate in end stage liver disease, hepatocellular carcinoma and the need for liver transplantation. Simple steatosis, or fatty liver, occurs early in NAFLD and may progress to non-alcoholic steatohepatitis, fibrosis and cirrhosis with increased risk of hepatocellular carcinoma. Prevalence estimates for NAFLD range from 2 to 44% in the general population and it has been estimated that NAFLD exists in up to 70% of people with type 2 diabetes. Although many obese people have NAFLD, there are many obese people who do not develop ectopic liver fat. The aim of this review which is based on a presentation at the Royal Society of Medicine, UK in December 2012 is to discuss development of NAFLD, ectopic fat accumulation and insulin resistance. The review will also describe the relationships between NAFLD, type 2 diabetes and CVD.