The strong relationship between over‐nutrition, central obesity, insulin resistance/metabolic syndrome and non‐alcoholic fatty liver disease (NAFLD) suggest pathogenic interactions, but key questions remain. NAFLD starts with over‐nutrition, imbalance between energy input and output for which the roles of genetic predisposition and environmental factors (diet, physical activity) are being redefined. Regulation of energy balance operates at both central nervous system and peripheral sites, including adipose and liver. For example, the endocannabinoid system could potentially be modulated to provide effective pharmacotherapy of NAFLD. The more profound the metabolic abnormalities complicating over‐nutrition (glucose intolerance, hypoadiponectinemia, metabolic syndrome), the more likely is NAFLD to take on its progressive guise of non‐alcoholic steatohepatitis (NASH). Interactions between steatosis and insulin resistance, visceral adipose expansion and subcutaneous adipose failure (with insulin resistance, inflammation and hypoadiponectinemia) trigger amplifying mechanisms for liver disease. Thus, transition from simple steatosis to NASH could be explained by unmitigated hepatic lipid partitioning with failure of local adaptive mechanisms leading to lipotoxicity. In part one of this review, we discuss newer concepts of appetite and metabolic regulation, bodily lipid distribution, hepatic lipid turnover, insulin resistance and adipose failure affecting adiponectin secretion. We review evidence that NASH only occurs when over‐nutrition is complicated by insulin resistance and a highly disordered metabolic milieu, the same ‘metabolic movers’ that promote type 2 diabetes and atheromatous cardiovascular disease. The net effect is accumulation of lipid molecules in the liver. Which lipids and how they cause injury, inflammation and fibrosis will be discussed in part two.