Fatty liver (or steatosis) is an increasingly common finding in histolgical evaluation of liver biopsies. It is frequently associated with obesity, diabetes, metabolic syndromes, and/or alcohol abuse. When the steatosis is accompanied by inflammation and fibrosis, the risk of progression to severe liver disease is high. The aim of this paper is to review the clinical features, pathophysiology, natural history, and options for the treatment of nonalcoholic and alcoholic forms of fatty liver disease.