Obesity is associated with increased deposition of fat in the liver (nonalcoholic fatty liver disease; NAFLD), which develops when hepatic fatty acid availability from plasma and de novo synthesis exceeds hepatic fatty acid disposal by oxidation and triglyceride export. Therefore, an increase in intrahepatic triglyceride content (steatosis) results from an imbalance between interacting metabolic events. Hepatic steatosis is associated with an array of adverse changes in glucose, fatty acid and lipoprotein metabolism, not only locally (in the liver) but also at the whole body level. These metabolic abnormalities are likely responsible for many cardiometabolic risk factors associated with NAFLD, such as insulin resistance and dyslipidemia. However, whether NAFLD is the cause of metabolic dysfunction or whether metabolic dysfunction is responsible for excessive intrahepatic triglyceride accumulation remains unclear at this time. Understanding the factors involved in the pathogenesis and pathophysiology of NAFLD will lead to a better understanding of the mechanisms responsible for the metabolic complications of obesity.