The prevalence of fatty liver in children is unknown and its relationship to obesity is poorly defined. The present study of 810 northern Japanese children (4–12 years old) determined the prevalence of fatty liver in the pediatric population and its relationship to obesity. Diagnosis of fatty liver was based on established real-time ultrasonographic criteria. The overall prevalence of fatty liver was 2.6% and was higher for boys (3.4%) than for girls (1.8%), although not statistically significant (P=0.15). Fatty liver was found in children as young as 6 years of age. There was no significant association between the prevalence of fatty liver and height (physical growth). There was a strong positive correlation between fatty liver prevalence and established obesity indices: Rohrer's index-² linear trend =59.2,P<0.0001; body mass index-² linear trend =91.6,P<0.0001; and age-gender-adjusted Japanese standard index of weight for height-² linear trend =93.2,P<0.0001. However, direct measurement of abdominal subcutaneous fat thickness by ultrasonography was the best predictor of fatty liver: ² linear trend =159,P<0.0001. These results indicate that fatty liver may develop very early in life, and there is a direct relationship between degree of obesity and fatty liver in children.