Childhood obesity is a worldwide health problem associated with an increase in the prevalence and severity of nonalcoholic fatty liver disease (NAFLD). This review covers the progress made between 2005 and 2007 in understanding the epidemiology, histology, and treatment of pediatric NAFLD. The number of children with NAFLD presents a major public health crisis. Noninvasive diagnostic tools offer future promise, but currently are unable to grade and stage disease. Therefore, pediatric NAFLD remains a clinico-pathological diagnosis requiring direct demonstration of liver steatosis and the exclusion of other causes of fatty liver and/or hepatitis. There are currently no proven therapies for NAFLD in children; however, TONIC (Treatment of Nonalcoholic Fatty Liver Disease in Children), the first multicenter clinical trial of pediatric NAFLD, is currently in progress. Such studies are imperative to address fundamental questions regarding cause and cure.