Nonalcoholic fatty liver disease (NAFLD) is a burgeoning health problem of unknown etiology that varies in prevalence among ethnic groups. To identify genetic variants contributing to differences in hepatic fat content, we performed a genome-wide association scan of nonsynonymous sequence variations (n=9,229) in a multiethnic population. An allele in PNPLA3 (rs738409; I148M) was strongly associated with increased hepatic fat levels (P=5.9×10 −10) and with hepatic inflammation (P=3.7×10 −4). The allele was most common in Hispanics, the group most susceptible to NAFLD; hepatic fat content was > 2-fold higher in PNPLA3-148M homozygotes than in noncarriers. Resequencing revealed another allele associated with lower hepatic fat content in African-Americans, the group at lowest risk of NAFLD. Thus, variation in PNPLA3 contributes to ethnic and inter-individual differences in hepatic fat content and susceptibility to NAFLD.