Nonalcoholic fatty liver disease (NAFLD) has rapidly become the most common form of chronic liver disease in children and adolescents. Over the past 5 years, developments have revolutionized our understanding of the genetic factors, natural history, diagnostic modalities and therapeutic targets for this disease. New polymorphisms, such as those in PNPLA3, TM6SF2, MBOAT7 and GCKR, have been identified and used to predict the development and severity of NAFLD in both adults and children, and their interaction with environmental factors has been elucidated. Studies have demonstrated the true burden of paediatric NAFLD and its progression to end-stage liver disease in adulthood. In particular, nonalcoholic steatohepatitis can progress to advanced fibrosis and cirrhosis, emphasizing the importance of early diagnosis. Non-invasive imaging tests, such as transient elastography, will probably replace liver biopsy for the diagnosis of nonalcoholic steatohepatitis and the assessment of fibrosis severity in the near future. The therapeutic landscape is also expanding rapidly with the development of drugs that can modify liver steatosis, inflammation and fibrosis, indicating that pharmacotherapy for NAFLD will become available in the future. In this Review, we summarize current knowledge and new advances related to the pathogenesis and management of paediatric NAFLD.