With the epidemic of childhood obesity, nonalcoholic fatty liver disease (NAFLD) has become the most common cause of chronic liver disease in pediatrics. NAFLD is strongly associated with insulin resistance and increased level of serum free fatty acids (FFAs). FFAs have direct hepatotoxicity through the induction of an endoplasmic reticulum stress response and subsequently activation of the mitochondrial pathway of cell death. FFAs may also result in lysosomal dysfunction and alter death receptor gene expression. Lipoapoptosis is a key pathogenic process in NAFLD, and correlates with progressive inflammation, and fibrosis. Accumulation of triglyceride in the liver results from uptake and esterification of FFAs by the hepatocyte, and is less likely to be hepatotoxic per se. To date, there are no proven effective therapies that halt NAFLD progression or unfortunately improve prognosis in children. The cellular mechanisms of lipotoxicity are complex but provide potential therapeutic targets for NAFLD. In this review we discuss several potential therapeutic opportunities in detail including inhibition of apoptosis, c-Jun-N-terminal kinase, and endoplasmic reticulum stress pathways.