Nonalcoholic fatty liver disease (NAFLD) is characterized by insulin resistance, elevated serum levels of free fatty acids (FFAs) and fatty infiltration of the liver. Accumulation of triglycerides in the hepatocyte results from the uptake and esterification of circulating FFAs by the liver. Contrary to current theory, hepatic steatosis appears to be a detoxification process, as FFAs are directly cytotoxic for the hepatocyte and inhibition of triglyceride formation enhances FFAs toxicity. Hepatocyte apoptosis is a key feature of NAFLD and correlates with disease severity. Since FFA-induced toxicity, or lipoapoptosis, represents a mechanism for the pathogenesis of NAFLD, this article will highlight the cellular pathways contributing to hepatocyte lipoapoptosis. To date, there is no proven effective therapy for patients with NAFLD and insights into the molecular mediators of lipoapoptosis should help promote effective therapeutic strategies for this disease.