Accumulating evidence indicates that mitochondria have a key role in non-alcoholic fatty liver disease (NAFLD). C57BL/6J mice were fed a choline-deficient, ethionine-supplemented (CDE) diet. Histological studies demonstrated accumulation of fat vacuoles in up to 90% of hepatocytes in mice fed the CDE diet for 14 days. In addition, a decrease in mitochondrial levels, together with an increase in superoxide radicals' levels were observed, indicating elevation of oxidative stress in hepatocytes. ATP levels were decreased in livers from CDE-fed mice after overnight fasting. This was accompanied by a compensative and significant increase in peroxisome-proliferator-activated receptor-γ coactivator 1α (PGC1α) mRNA levels in comparison to control livers. However, there was a reduction in PGC1α protein levels in CDE-treated mice. Moreover, the expression of mitochondrial biogenesis genes nuclear respiratory factor 1 (NRF-1), mitochondrial transcription factor A (TFAM), mitochondrial transcription factor B1 (TFB1M) and mitochondrial transcription factor B2 (TFB2M), which are all regulated by PGC1α activity, remained unchanged in fasted CDE-treated mice. These results indicate impaired activity of PGC1α. The impaired activity was further confirmed by chromatin immunoprecipitation analysis, which demonstrated decreased interaction of PGC1α with promoters containing NRF-1 and NRF-2 response elements in mice fed the CDE diet. A decrease in PGC1α ability to activate the expression of the gluconeogenic gene phosphoenol-pyruvate carboxykinase was also observed. This study demonstrates, for the first time, that attenuated mitochondrial biogenesis in steatotic livers is associated with impaired biological activity of PGC1α.