OBJECTIVE: To examine the factors associated with liver steatosis in severely obese subjects and to test the potential reversibility of fatty liver after weight loss. DESIGN: Retrospective clinical study. SUBJECT: 528 obese patients before bariatric surgery and 69 obese subjects of the initial cohort evaluated before and 27±15 months after gastroplasty. MEASUREMENTS: Fatty deposition (scored as mild, moderate or severe) and inflammatory changes were evaluated in liver biopsies; clinical (body mass index (BMI), age, gender, duration of obesity) and biological (glucose, triglycerides, liver enzymes) parameters were related to histological findings. RESULTS: 74% of the 528 biopsies showed fatty change, estimated as mild in 41% of cases, moderate in 32% and severe in 27%. The prevalence of steatosis was significantly higher in men than in women (91% vs 70%, P=0.001) and in patients with impaired glucose tolerance or type 2 diabetes compared with nondiabetics (89% vs 69% P=0.001). The severity of the steatosis was associated with BMI (P=0.002) but not with the duration of obesity or the age of the patient. When compared with patients without fatty change, those with liver steatosis had significantly higher fasting plasma glucose (5.5 mmol/l vs 5.1 mmol/l, P=0.007) and triglycerides (1.8 mmol/l vs 1.3 mmol/l, P=0.002). Mean serum liver enzyme activities (alkaline phosphatase, aspartate aminotransferase (AST), alanine aminotransferase (ALT) and gamma-glutamyl-transpeptidase (γGT) were significantly (Pvs 13% before, Pvs 83% before, P=0.001). However, the severity of the steatosis was significantly (Pvs 21%; moderate: 23% vs 37%; severe: 15% vs 42%). In addition, a significant increase of hepatitis was observed in 26% of the biopsies (vs 14% before, P<0.05). CONCLUSIONS: Liver steatosis in obese subjects is associated with men, diabetic status, BMI, higher fasting glucose and hypertriglyceridaemia. Postgastroplasty weight loss reduces liver steatosis, but seems to increase the incidence of inflammatory lobular hepatitis.