Fatty liver disease comprises a spectrum ranging from simple steatosis to steatohepatitis which can progress to liver cirrhosis and hepatocellular cancer. Hepatic lipotoxicity may ensue when the hepatic capacity to utilize, store and export fatty acids (FA) as triglycerides is overwhelmed. Additional mechanisms of hepatic lipotoxicity include abnormal FA oxidation with formation of reactive oxygen species, disturbances in cellular membrane FA and phospholipid composition, alterations of cholesterol content and ceramide signalling. Lipotoxicity is a key factor for the progression of fatty liver disease by inducing hepatocellular death, activating Kupffer cells and an inflammatory response, impairing hepatic insulin signalling resulting in insulin resistance, and activation of a fibrogenic response in hepatic stellate cells that can ultimately lead to cirrhosis. Therefore, the concept of hepatic lipotoxicity should be considered in future therapeutic concepts for fatty liver disease. Copyright (c) 2009 Elsevier B.V. All rights reserved.