Nonalcoholic fatty liver disease represents a spectrum of histopathologic abnormalities, the prevalence of which may be as high as 24% of the population of the United States. Nonalcoholic fatty liver disease will play a major role in the science and practice of gastroenterology in the near future. The fundamental derangement in nonalcoholic fatty liver disease is insulin resistance, a key component of the metabolic syndrome, which includes type 2 diabetes mellitus, hypertriglyceridemia, essential hypertension, low circulating high-density lipoprotein, and obesity. The natural history of fatty liver disease is not always benign, and causality for cirrhosis and chronic liver disease is well-founded in the literature. Treatment strategies are limited and, at present, are primarily focused on weight loss and use of insulin sensitizing agents, including the thiazolidenediones. Recent data clearly implicate hepatic insulin resistance as a culprit in accumulation of free fatty acids as triglycerides in hepatocytes. Hepatic insulin resistance is clearly exacerbated by systemic insulin resistance and impaired handling by skeletal muscle and adipose tissue of both glucose and free fatty acids. The key consequence of hepatic insulin resistance, impaired hepatocyte insulin signal transduction, results in adverse cellular and molecular changes exacerbating hepatocyte triglyceride storage. Cytokines secreted by white adipose tissue, adipokines, have emerged as key players in glucose and fat metabolism previously thought controlled largely by insulin. Modulation of adipokines may aid in further understanding of the pathophysiology and treatment of nonalcoholic fatty liver disease.