Steatosis of the liver is common in Western countries, affecting about 25% of donors for liver transplantation and 20% of patients undergoing liver resection. Transplantation of livers with severe steatosis (>60%) is associated with a high risk of primary nonfunction, and these livers should not be used for organ donation. In contrast, transplantation with livers containing mild steatosis (<30%) yields results similar to those of transplantation performed with nonfatty livers. The outcome of livers with moderate steatosis (30 to 60%) are varying, and the use of these organs depends on the existence of additional risk factors. Similarly, liver resection in patients with steatosis is associated with a risk of postoperative mortality when compared with patients with nonfatty livers (14% versus 2%). Although hepatic steatosis is an important risk factor for surgery, little is known about the mechanisms of injury. In animal experiments, steatosis is associated with decreased ATP production and a disturbance of sinusoidal flow. Further contributing factors may include Kupffer cell dysfunction and leukocyte adhesion. Fatty hepatocytes have reduced tolerance against ischemic injury with a predominant necrotic form of cell death. In addition, the ability of hepatocytes to regenerate after major tissue loss is impaired in the steatotic liver. Very few protective strategies are known. Ischemic preconditioning and intermittent clamping protect the human liver against prolonged periods of ischemia. These techniques appear to be particularly protective in the steatotic liver. New insights into the mechanisms of liver failure in steatotic organs are needed to decrease the risk of surgery and increase the pool of organ donors.