Abstract The presence of fat droplets in hepatocytes is one of the most common histological abnormalities in liver biopsies. Two distinct patterns are found: macrovesicular and microvesicular. The former is seen more frequently and is a feature of alcohol-induced liver injury and a complication of obesity and type II diabetes mellitus. In its pure form—simple steatosis—it is reversible and is not associated with significant impairment of hepatic function. However, the fat accumulation may be accompanied by inflammation and necrosis and with variable amounts of fibrosis—so-called steatohepatitis. This is a more serious condition and may in itself be complicated by portal hypertension and liver failure but it is also a precursor of cirrhosis. The classical example is alcoholic hepatitis but increasing numbers of patients are being recognised in which the steatohepatitis is not a consequence of alcohol abuse. This is termed non-alcoholic steatohepatitis (NASH). Microvesicular steatosis is seen in a variety of conditions which have in common abnormalities of mitochondrial function and in particular defects in beta-oxidation; this includes acute fatty liver of pregnancy and Reye's syndrome. These conditions are often complicated by coma and carry a high risk of death. Microvesicular steatosis may be difficult to identify in routinely stained sections of liver biopsies and histochemical methods may be of help in the diagnosis.