Insulin resistance (IR) commonly is associated with nonalcoholic steatohepatitis (NASH). To establish whether IR causes NASH, this study was undertaken to determine if improving IR would improve the histologic features that define NASH. Thirty adults with prior biopsy evidence of NASH were enrolled to receive rosiglitazone, 4 mg twice daily for 48 weeks. All patients were overweight (body mass index [BMI] > 25 kg/m2) and 23% were severely obese (BMI > 35 kg/m2); 50% had impaired glucose tolerance or diabetes. Liver biopsy specimens were obtained before beginning treatment and at treatment completion. Twenty-six patients had posttreatment biopsies; of these, 22 had initial protocol liver biopsies that met published criteria for NASH on subsequent blinded evaluation. Within this initial NASH group, the mean global necroinflammatory score significantly improved with treatment and biopsies of 10 patients (45%) no longer met published criteria for NASH after treatment. Significant improvement in hepatocellular ballooning and zone 3 perisinusoidal fibrosis also occurred. Five patients withdrew early; the 25 patients completing 48 weeks of treatment had significantly improved insulin sensitivity and mean serum alanine aminotransferase (ALT) levels (104 initially, 42 U/L at the end of treatment). Adverse effects led to withdrawal of 3 patients (10%). Weight gain occurred in 67% of patients and the median weight increase was 7.3%. Within 6 months of completing treatment, liver enzyme levels had increased to near pretreatment levels. In conclusion, improving insulin sensitivity with rosiglitazone resulted in improved histologic markers of NASH, an observation suggesting that insulin resistance contributes to its development and that improving insulin sensitivity may be important in treating this liver disease.