Obesity has emerged as a significant global health problem in the children. Nonalcoholic fatty liver disease (NAFLD) is a serious complication of childhood obesity and characterized by macrovesicular steatosis that occur in the absence of consumption of harmful amounts of alcohol. NAFLD ranges from: simple steatosis, steatosis with nonspecific inflammation, steatohepatitis, cirrhosis and hepatocellular carcinoma. It is already evident that children with NASH risk progressive liver damage, including liver cirrhosis. The aim of this study is to determine the prevalence of asymptomatic hepatic steatosis and presumed nonalcoholic steatohepatitis, in our local population of obese Egyptian children referred for medical assessment, and to assess the correlation between severity of ultrasonographic hepatic steatosis and degree of obesity, insulin resistance and serum biochemical abnormalities. Seventy six patients with simple obesity: 37 were overweight (17 male and 20 females) and 39 were obese (21 males and 18 females) (mean age 7.7±3.5 years) were included in the study. They were subjected to: 1- Assessment of biochemical tests of liver functions, lipid profile (TG, total cholesterol, HDL-c and LDL-c), post suppression cortisol and ACTH., fasting insulin, C-peptide, serum ferritin and HBV&HCV markers in selected cases. 2-Full abdominal ultrasonography 3- Liver biopsy for selected cases (those had clinical hepatomegaly ± elevated liver enzymes ± echogenic liver). The prevalence of NAFLD in our study was 19.7% (simple steatosis 10.5% and NASH 9.2%). BMI, W/H ratio, grade Ш echogenicity of the lever and dyslipidemia were highly predicting factors for NASH.