Nonalcoholic fatty liver disease (NAFLD) is a significant complication of obesity and is recognized as the hepatic manifestation of the metabolic syndrome. The process occurs in adults and children and is characterized by the presence of increased amounts of fat in the liver (steatosis). With inflammation, cell death and scarring (fibrosis), the process may result in end-stage liver disease, or be a precursor for hepatocellular carcinoma. Excess hepatic fat is now recognized as an independent marker for increased cardiovascular risk. Even though imaging studies and laboratory-based tests are accurate at detecting significant steatosis and/or advanced fibrosis, respectively, the diagnosis and characterization of NAFLD ultimately depend on histopathologic evaluation, as the parenchymal alterations that comprise the spectrum of injury in NAFLD include patterns as well as specific lesions. Histologic findings in children may differ from those in adults. In this Review, the histologic features that are diagnostic and discriminatory between steatosis and steatohepatitis, the significance of the distinction between steatosis and steatohepatitis, the types and locations of fibrosis, and the histologic variances between adult and pediatric NAFLD are discussed. Clinical advantages as well as potential drawbacks of liver biopsy are presented. Current pathophysiologic concepts relevant to histologic findings are discussed.