Hepatic steatosis is an underlying feature of nonalcoholic fatty liver disease (NAFLD), which is the most common form of liver disease and is present in up to ∼70% of individuals who are overweight. NAFLD is also associated with hypertriglyceridaemia and low levels of HDL, glucose intolerance, insulin resistance and type 2 diabetes mellitus. Hepatic steatosis is a strong predictor of the development of insulin resistance and often precedes the onset of other known mediators of insulin resistance. This sequence of events suggests that hepatic steatosis has a causal role in the development of insulin resistance in other tissues, such as skeletal muscle. Hepatokines are proteins that are secreted by hepatocytes, and many hepatokines have been linked to the induction of metabolic dysfunction, including fetuin A, fetuin B, retinol-binding protein 4 (RBP4) and selenoprotein P. In this Review, we describe the factors that influence the development of hepatic steatosis, provide evidence of strong links between hepatic steatosis and insulin resistance in non-hepatic tissues, and discuss recent advances in our understanding of how steatosis alters hepatokine secretion to influence metabolic phenotypes through inter-organ communication.