Studies of animals with obesity-related liver disease have taught us much about the mechanisms that mediate this pathology. Our work with genetically obese, insulin-resistant ob/ob mice demonstrates that hepatocytes become steatotic and die at increased rates. Thus, ob/ob mice develop non-alcoholic steatohepatitis (NASH) spontaneously. NASH is intimately related to the insulin resistance (i.e., metabolic) syndrome, a constellation of disorders that result from abnormal production of hormones and cytokines that regulate inflammatory responses. Like humans with the metabolic syndrome, ob/ob mice exhibit increased tumor necrosis factor (TNF) but relatively low levels of adiponectin. Because TNF and adiponectin typically antagonize each other, the combination of increased TNF and decreased adiponectin promotes a state of high TNF activity. Consequently, hepatocytes generate excessive reactive oxygen species (ROS), have altered viability, accumulate lipid and are resistant to insulin. Treatments that inhibit TNF activity or that increase adiponectin improve NASH in ob/ob mice, other mice and humans with NASH. Hence, there is no doubt that cytokine and hormonal imbalances play a key role in the pathogenesis of NASH. However, the fundamental cellular events involved are still poorly understood. Even within very small areas of livers with NASH, most hepatocytes are merely steatotic, while others are ballooned (pre-necrotic), and still others have succumbed to apoptosis. This observation suggests cell-to-cell variability in the response to chronic inflammatory stress. In NASH, most steatotic hepatocytes survive by inducing adaptive, cytoprotective factors. However, such cells respond to super-imposed toxic and mitogenic stimuli differently than (3)naïve(2) (un-adapted) hepatocytes. Fatty hepatocytes tend to be more vulnerable to ATP depletion and less proliferative, perpetuating chronic liver injury while encouraging the expansion of liver progenitor populations that may become neoplastic. Finally, like other causes of chronic injury, NASH increases the risk for cirrhosis. Studies of ob/ob mice demonstrate that progression to cirrhosis is potentiated by leptin. Leptin probably acts at multiple levels to promote hepatic fibrosis, including direct activation of stellate cells via leptin receptors, regulation of pro- and anti-fibrogenic cytokine production by innate immune cells, and modulation of other neuronal factors that regulate stellate cell activation. The latter two mechanisms seem to dominate because stellate cell activation, fibrogenic cytokine production, collagen gene expression and fibrosis can all be induced by manipulating cytokines and neuronal factors in ob/ob mice (that are genetically deficient in leptin). Thus, studies in mice have uncovered several basic mechanisms that explain the dysfunction that occurs in different types of liver cells during the metabolic syndrome. This has important therapeutic implications for human NASH.