Genetically obese fatty/fatty rats and obese/obese mice exhibit increased sensitivity to endotoxin hepatotoxicity, quickly developing steatohepatitis after exposure to low doses of lipopolysaccharide (LPS). Among obese animals, females are more sensitive to endotoxin liver injury than males. LPS induction of tumor necrosis factor alpha (TNF alpha), the proven affecter of endotoxin liver injury, is no greater in the livers, white adipose tissues, or sera of obese animals than in those of lean controls. Indeed, the lowest serum concentrations of TNF occur in female obese rodents, which exhibit the most endotoxin-induced liver injury. Several cytokines that modulate the biological activity of TNF are regulated abnormally in the livers of obese animals. After exposure to LPS, mRNA of interferon gamma, which sensitizes hepatocytes to TNF toxicity, is overexpressed, and mRNA levels of interleukin 10, a TNF inhibitor, are decreased. The phagocytic activity of liver macrophages and the hepatic expression of a gene encoding a macrophage-specific receptor are also decreased in obesity. This new animal model of obesity-associated liver disease demonstrates that hepatic macrophage dysfunction occurs in obesity and suggests that this might promote steatohepatitis by sensitizing hepatocytes to endotoxin.