NAFLD (non-alcoholic fatty liver disease) refers to a wide spectrum of liver damage, ranging from simple steatosis to NASH (non-alcoholic steatohepatitis), advanced fibrosis and cirrhosis. NAFLD is strongly associated with insulin resistance and is defined by accumulation of liver fat >5% per liver weight in the presence of <10 g of daily alcohol consumption. The exact prevalence of NAFLD is uncertain because of the absence of simple non-invasive diagnostic tests to facilitate an estimate of prevalence. In certain subgroups of patients, such as those with Type 2 diabetes, the prevalence of NAFLD, defined by ultrasound, may be as high as 70%. NASH is an important subgroup within the spectrum of NAFLD that progresses over time with worsening fibrosis and cirrhosis, and is associated with increased risk for cardiovascular disease. It is, therefore, important to understand the pathogenesis of NASH and, in particular, to develop strategies for interventions to treat this condition. Currently, the ‘gold standard’ for the diagnosis of NASH is liver biopsy, and the need to undertake a biopsy has impeded research in subjects in this field. Limited results suggest that the prevalence of NASH could be as high as 11% in the general population, suggesting there is a worsening future public health problem in this field of medicine. With a burgeoning epidemic of diabetes in an aging population, it is likely that the prevalence of NASH will continue to increase over time as both factors are important risk factors for liver fibrosis. The purpose of this review is to: (i) briefly discuss the epidemiology of NAFLD to describe the magnitude of the future potential public health problem; and (ii) to discuss extra- and intra-hepatic mechanisms contributing to the pathogenesis of NAFLD, a better understanding of which may help in the development of novel treatments for this condition.