Insulin resistance in humans is not always accompanied by obesity, since severe insulin resistance also characterizes patients lacking subcutaneous fat such as those with HAART- (highly-active antiretroviral therapy)-associated lipodystrophy. Both obese and lipodystrophic patients, however, have an increase in the amount of fat hidden in the liver. Liver fat content can be accurately quantified non-invasively by proton magnetic resonance spectroscopy. It is closely correlated with fasting insulin concentrations and direct measures of hepatic insulin sensitivity while the amount of subcutaneous adipose tissue is not. An increase in liver fat content has been shown to predict type 2 diabetes, independently of other cardiovascular risk factors. This is easily explained by the fact that the liver, once fatty, overproduces most of the known cardiovascular risk factors such as very low density lipoprotein (VLDL), glucose, C-reactive protein (CRP), plasminogen activator inhibitor-1 (PAI-1), fibrinogen and coagulation factors. The causes of inter-individual variation in liver fat content, independent of obesity, are largely unknown but could involve differences in signals from adipose tissue such as in the amount of adiponectin produced and differences in fat intake. Adiponectin deficiency characterizes both lipodystrophic and obese insulin-resistant individuals, and serum levels correlate with liver fat content. Liver fat content can be decreased by weight loss and by a low as compared to a high fat diet. In addition, treatment of both lipodystrophic and type 2 diabetic patients with peroxisome proliferators activator receptor-gamma (PPARgamma) agonists, but not metformin, decreases liver fat and markedly increases adiponectin levels. The fatty liver may help to explain why some but not all obese individuals are insulin resistant and why even lean individuals may be insulin resistant, and thereby at risk of developing type 2 diabetes and cardiovascular disease.