Epidemiological studies have shown that obesity is a risk factor for hepatocellular carcinoma. Similar studies further indicate that diabetes is also a major risk factor. Both obesity and diabetes are frequently associated with nonalcoholic fatty liver disease, and case reports have shown progression of nonalcoholic fatty liver disease to cirrhosis and hepatocellular carcinoma. Although no study has clearly tied all of these variables together, it is likely that the association of hepatocellular carcinoma with obesity represents the progression of underlying nonalcoholic fatty liver disease to cirrhosis. The mechanism most likely involves replicative senescence of steatotic mature hepatocytes and compensatory hyperplasia of progenitor (oval) cells as a reaction to chronic injury due to ongoing nonalcoholic steatohepatitis and resultant hepatic fibrosis. Growth factors associated with chronic inflammation, type 2 diabetes, and DNA mutations as a result of lipid peroxidation probably play significant roles in clonal expansion and hepatocellular carcinoma progression. It remains unclear whether cirrhosis is a prerequisite for the development of hepatocellular carcinoma or whether hepatocellular carcinoma can develop in fatty liver in the absence of cirrhosis. However, well-documented case reports suggest that most cases of hepatocellular carcinoma arise in the setting of nonalcoholic steatohepatitis with cirrhosis. Whether therapy aimed at nonalcoholic fatty liver disease reduces the risk of hepatocellular carcinoma remains to be shown. Prophylactic measures and the role of cancer surveillance have not been adequately investigated, but current evidence suggests a risk for hepatocellular carcinoma in nonalcoholic steatohepatitis-related cirrhosis that rivals that of hepatocellular carcinoma in hepatitis C virus-related cirrhosis, particularly in older male patients.