What is Fatty Liver? Fatty liver, also known as hepatic steatosis, occurs when excessive fat builds up in liver cells. This condition can be broadly categorized into two types: Non-alcoholic Fatty Liver Disease (NAFLD): This is the most common form of fatty liver and is not related to alcohol consumption. It typically occurs in individuals who are overweight or obese, have diabetes, or have high cholesterol or triglyceride levels. Alcoholic Fatty Liver Disease (AFLD): This condition is caused by excessive alcohol consumption and is the earliest stage of alcohol-related liver disease.