Nonalcoholic fatty liver disease (NAFLD) is a highly prevalent chronic liver condition evolving in a proportion of patients into nonalcoholic steatohepatitis (NASH), an aggressive form of NAFLD associated with increased cardiovascular mortality and significant risk of progressive liver disease, including fibrosis, cirrhosis and hepatocellular carcinoma. At present, no specific therapies for NASH exist. In this review, we examine the evidence supporting activation of the farnesoid X receptor (FXR), a nuclear hormone receptor regulated by bile acids (BAs), for the treatment of NASH. We also discuss the potential of the semi-synthetic BA derivative obeticholic acid (OCA), a first-in-class FXR agonist, as a safe and effective drug to address this significant unmet medical need.