Compelling evidence supports the concept that nonalcoholic fatty liver disease (NAFLD) represents the hepatic component of metabolic syndrome (MetS). Intrahepatic fat seems to predict more strongly than does visceral adiposity an individual's cardiovascular risk and the likelihood that metabolic abnormalities are present in youth. Young individuals with fatty liver are more insulin resistant and present with a higher prevalence of metabolic abnormalities than do individuals without intrahepatic fat accumulation. They also present with a certain endothelial dysfunction and greater carotid intima-media thickness. Conversely, youth with MetS seem to have an increased risk of developing liver inflammation, a condition termed nonalcoholic steatohepatitis (NASH), and fibrosis. In the context of MetS, the liver is central in that it can drive both hepatic and systemic insulin resistance, trigger low-grade inflammation, and promote atherogenic processes. In the context of MetS, NAFLD and altered carbohydrate metabolism track from childhood to adulthood. Thus, prevention, recognition, and effective treatment of these two abnormalities may limit the burden of morbidity and mortality associated with obesity and may delay onset of cardiovascular disease in early adulthood. The present review aims at systematically presenting evidence of the critical interplay of fatty liver and altered glucose metabolism in youth. It attempts to provide pathogenetic explanations for such an association and the rationale for its treatment, with particular regard to nutritional interventions. Key teaching points: Overweight and obese youth should be screened for fatty liver disease once after puberty by liver function tests and ultrasonography. Screening for fatty liver should be accurately performed in young patients with features of metabolic syndrome. Obese patients with fatty liver are at increased risk for altered glucose metabolism, thus they should undergo an oral glucose tolerance test. A nutritional and behavioral intervention aimed at achieving a permanent change of the lifestyle in patients and their parents is recommended.