Nonalcoholic fatty liver disease (NAFLD) represents a spectrum of liver diseases that range from hepatic steatosis at the most clinically benign end of the spectrum, through an intermediate lesion, nonalcoholic steatohepatitis (NASH), to cirrhosis at the opposite extreme. Epidemiology studies have estimated that about 20–30% of adults in the United States and other Western countries have NAFLD, and of these about 10% (2–3% of adults) meet the diagnostic criteria of NASH. Studies of animals and humans with obesity-related fatty liver disease have revealed much about the mechanisms that mediate this common pathology. The pathogenesis of NASH is multifactorial and includes insulin resistance, excessive intracellular fatty acids, oxidant stress, mitochondrial dysfunction and the role of innate immunity. This review will briefly discuss the epidemiology of NAFLD and focus on current understanding of the pathogenesis of NASH.