Non-alcoholic fatty liver disease is a new clinicopathological condition of emerging importance, now recognized as the most common cause of abnormal liver tests. It is characterized by a wide spectrum of liver damage: simple steatosis may progress to advanced fibrosis and to cryptogenic cirrhosis through steatohepatitis, and ultimately to hepatocellular carcinoma. Obesity is the most significant single risk factor for the development of fatty liver, both in children and in adults; obesity is also predictive of the presence of fibrosis, potentially progressing to advanced liver disease. From a pathogenic point of view, insulin resistance plays a central role in the accumulation of triglycerides within the hepatocytes and in the initiation of the inflammatory cascade. Chronic hepatocellular injury, necroinflammation, stellate cell activation, progressive fibrosis and ultimately, cirrhosis may be initiated by peroxidation of hepatic lipids and injury-related cytokine release. In the last few years, several pilot studies have shown that treatment with insulin-sensitizing agents, anti-oxidants or cytoprotective drugs may be useful, but there is no evidence-based support from randomized clinical trials. Modifications in lifestyle (e.g. diet and exercise) to reduce obesity remain the mainstay of prevention and treatment of a disease, which puts a large number of individuals at risk of advanced liver disease in the near future.