The hepatic complications of morbid obesity range from steatosis to steatohepatitis (Non-alcoholic steatohepatitis [NASH]), fibrosis, cirrhosis and finally hepatocellular carcinoma. The pathophysiological mechanisms of the progression of a normal liver to a liver showing steatosis and then steatohepatitis are complex, including, per se, insulin-resistance, iron accumulation, oxidative stress and hepatocyte death. An imbalance in anti- and pro-inflammatory factors may be the trigger. These factors can originate from intra- or extrahepatic sites, particularly the adipose tissue and the gut. This review will provide insight into the current diagnosis and understanding of hepatic inflammation including non-invasive markers of NASH (markers of hepatocyte death), intrahepatic mechanisms (regulation of the immune and inflammatory response, hepatocellular iron deposition, hepatocyte death) and extrahepatic factors (from adipose tissue and gut) in morbidly obese patients.