Morbid obesity has been associated with hepatic steatosis and occasional cirrhosis. Despite producing weight loss, intestinal bypass procedures formerly performed to correct morbid obesity, often worsened steatosis and fibrosis, and occasionally resulted in hepatic failure. Current surgical procedures of choice for morbid obesity involve gastric bypass with gastrojejunostomy. Ninety-one liver biopsies taken at the time of gastric bypass for morbid obesity (mean body weight 125.8 kg), and 106 biopsies taken from the same patients from 2 to 61 months later (mean body weight 89.4 kg) were studied. Steatosis and perisinusoidal fibrosis were assessed in histologic sections. Serum albumin, alkaline phosphatase, aspartate aminotransferase (AST), and total bilirubin levels were measured before most biopsies were taken. Both pre- and post-gastric bypass hepatic steatosis varied directly with body weight (r = .5231, P < .001). Steatosis varied inversely with length of time after gastric bypass (r = .4590, P < .001). Of the original biopsies, 37% had lipid vacuoles in at least 26% of hepatocytes. After gastric bypass, 65 patients had reduced steatosis, 18 patients with no steatosis, and 5 patients with minimal steatosis had no change, and 3 patients had increased steatosis. Pre-gastric bypass biopsies from 13 patients had perisinusoidal fibrosis (PSF) that was marked with bridging in three patients, was moderate in one patient, and slight in nine patients. Following gastric bypass, PSF was eliminated in 10 patients, reduced in one patient, and the same in two patients. One patient developed PSF after gastric bypass. Of the three patients who had undergone previous intestinal bypass procedures, two had slight PSF in the biopsies taken at the time of gastric bypass, and one of these had slight PSF in the follow-up biopsy. Serum biochemical abnormalities tended to be slight. Before gastric bypass, serum albumin was low in 11% of cases, alkaline phosphatase was high in 14% of cases, AST was high in 11% of cases, and total bilirubin was high in 1% of cases. After gastric bypass, there was a small reduction in mean serum albumin from 43 g/L before to 41 g/L afterward (P < .05), and a slight rise in mean total bilirubin from 7.0 mumol/L before to 9.6 mu mol/L afterward (P < .01). Most hepatic fatty change and probably some PSF occurring in morbidly obese persons is reduced or eliminated with weight loss following gastric bypass surgery.