Nonalcoholic fatty liver disease (NAFLD) is the most common cause of chronic liver disease in children and adolescents in the United States, and most probably also in the rest of the industrialized world.As the prevalence of NAFLD in childhood increases with the worldwide obesity epidemic, there is an urgent need for diagnostic standards that can be commonly used by pediatricians and hepatologists. To this end, we performed a PubMed search of the adult and pediatric literature on NAFLD diagnosis through May 2011 using Topics and/or relevant Authors as search words. According to the present literature, NAFLD is suspected based on the association of fatty liver combined with risk factors (mainly obesity), after the exclusion of other causes of liver disease. The reference but imperfect standard for confirming NAFLD is liver histology. The following surrogate markers are presently used to estimate degree of steatosis and liver fibrosis and risk of progression to end-stage liver disease: imaging by ultrasonography or magnetic resonance imaging, liver function tests, and serum markers of liver fibrosis.NAFLD should be suspected in all of the overweight or obese children and adolescents older than 3 years with increased waist circumference especially if there is a NAFLD history in relatives. The typical presentation, however, is in children ages 10 years and older. The first diagnostic step in these children should be abdominal ultrasound and liver function tests, followed by exclusion of other liver diseases. Overweight/obese children with normal ultrasonographic imaging and normal liver function tests should still be monitored due to the poor sensitivity of these tests at a single assessment.Indications for liver biopsy include the following: to rule out other treatable diseases, in cases of clinically suspected advanced liver disease, before pharmacological/surgical treatment, and as part of a structured intervention protocol or clinical research trial.