The genetic factors associated with susceptibility to nonalcoholic fatty liver disease (NAFLD) in pediatric obesity remain largely unknown. Recently, a nonsynonymous single-nucleotide polymorphism (rs738409), in the patatin-like phospholipase 3 gene (PNPLA3) has been associated with hepatic steatosis in adults. In a multiethnic group of 85 obese youths, we genotyped the PNLPA3 single-nucleotide polymorphism, measured hepatic fat content by magnetic resonance imaging and insulin sensitivity by the insulin clamp. Because PNPLA3 might affect adipogenesis/lipogenesis, we explored the putative association with the distribution of adipose cell size and the expression of some adipogenic/lipogenic genes in a subset of subjects who underwent a subcutaneous fat biopsy. Steatosis was present in 41% of Caucasians, 23% of African Americans, and 66% of Hispanics. The frequency of PNPLA3(rs738409) G allele was 0.324 in Caucasians, 0.183 in African Americans, and 0.483 in Hispanics. The prevalence of the G allele was higher in subjects showing hepatic steatosis. Surprisingly, subjects carrying the G allele showed comparable hepatic glucose production rates, peripheral glucose disposal rate, and glycerol turnover as the CC homozygotes. Carriers of the G allele showed smaller adipocytes than those with CC genotype (P = 0.005). Although the expression of PNPLA3, PNPLA2, PPARγ2(peroxisome proliferator-activated receptor gamma 2), SREBP1c(sterol regulatory element binding protein 1c), and ACACA(acetyl coenzyme A carboxylase) was not different between genotypes, carriers of the G allele showed lower leptin (LEP)(P = 0.03) and sirtuin 1 (SIRT1) expression (P = 0.04). Conclusion: A common variant of the PNPLA3 gene confers susceptibility to hepatic steatosis in obese youths without increasing the level of hepatic and peripheral insulin resistance. The rs738409 PNPLA3 G allele is associated with morphological changes in adipocyte cell size. (HEPATOLOGY 2010.)