Severe lipodystrophy is characterized by diminished adipose tissue and hypoleptinemia, leading to ectopic triglyceride accumulation. In the liver, this is associated with steatosis, potentially leading to nonalcoholic steatohepatitis (NASH). We investigated the prevalence of NASH and the effect of leptin replacement in these patients. Ten patients with either generalized lipodystrophy (8 patients) or Dunnigan's partial lipodystrophy (2 patients) were included in this analysis. Paired liver biopsy specimens were obtained at baseline and after treatment with recombinant methionyl human leptin (r‐metHuLeptin), mean duration 6.6 months. The extents of portal and parenchymal inflammation, steatosis, ballooning, presence of Mallory bodies, and fibrosis in liver biopsy specimens were scored using a previously validated system developed to assess NASH activity. Histological disease activity was defined as the sum of ballooning, steatosis, and parenchymal inflammation scores. We concurrently tested serum triglycerides and aminotransferases and estimations of liver volume and fat content by magnetic resonance imaging. Eight of 10 patients met histological criteria for NASH at baseline. After treatment with r‐metHuLeptin, repeat histological examinations showed significant improvements in steatosis (P = .006) and ballooning injury (P = .005), with a reduction of mean NASH activity by 60% (P = .002). Fibrosis was unchanged. Significant reductions were seen in mean serum triglycerides (1206→226 mg/dL, P = .002), glucose (220→144 mg/dL, P = .02), insulin (46.4→24.8 μIU/mL, P = .004), ALT (54→24 U/L, P = .02), AST (47→22 U/L, P = .046), liver volume (3209→2391 cm³, P = .007), and liver fat content (31→11%, P = .006). In conclusion, r‐metHuLeptin therapy significantly reduced triglycerides, transaminases, hepatomegaly, and liver fat content. These reductions were associated with significant reductions in steatosis and the hepatocellular ballooning injury seen in NASH. (HEPATOLOGY 2005;41:753–760.)