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Nonalcoholic fatty liver disease, a cause of chronic liver disease in obese adults also occurs in obese children. In susceptible populations, fatty liver progresses to nonalcoholic steatohepatitis and eventually to fibrosis and cirrhosis. Nonalcoholic steatohepatitis is associated with elevation of alanine aminotransferase, although the aminotransferases can also be normal. The prevalence of nonalcoholic fatty liver disease in type 2 diabetes is unclear in adults and unknown in children.The aim of this study was to estimate the prevalence of elevated serum aminotransferases as a marker of nonalcoholic fatty liver disease in pediatric type 2 diabetes and to identify correlates of aminotransferase elevation.A chart review was completed on 115 children with type 2 diabetes at a pediatric diabetes clinic. The prevalence of elevated alanine aminotransferase was calculated from the 42% of patients with available aminotransferase measurements and correlations with fasting lipids, hemoglobin A-1c, body mass index, age and diabetes therapy were sought.The prevalence of elevated alanine aminotransferase was 48%. There was no association between elevations and other variables. Among subjects with elevated alanine aminotransferase, 39% were one to two times above normal, 26% were two to three times normal and 35% were greater than three times above normal. Several patients experienced improvement in aminotransferase elevations after using insulin-sensitizing medications.There is a high prevalence of elevated serum aminotransferases among children with type 2 diabetes unrelated to age, body mass index, glycemic control, blood lipids or diabetic therapy. The significance of this abnormality and its relationship to nonalcoholic fatty liver disease requires further evaluation.