The accuracy and clinical significance of sonography (US) in demonstrating fatty liver and hepatic fibrosis in chronic hepatitis C (CHC) are rarely reported. US had sensitivity 71.1%, specificity 72.9%, 58.7% positive predictive value (PPV), and 82.3% negative predictive value (NPV) in demonstrating histological steatosis ≥ 5%. US had sensitivity 85.7%, specificity 60.4%, 13% PPV, and 98.4% NPV in demonstrating histological steatosis ≥ 30% with clinical significance in predicting prognosis and therapeutic response in CHC. Subjects with fatty liver on US had a greater prevalence of body mass index (BMI) ≥ 25 kg/m2, inflammation-necrosis grade [2, and total bilirubin <1.2 mg/dl in multivariate analyses. US had sensitivity 27.4%, specificity 62.5%, 71.9% PPV, and 19.7% NPV in demonstrating histological fibrosis of stage II or above, and sensitivity 13.6%, specificity 66.3%, 9.4% PPV, and 75.0% NPV in demonstrating fibrosis of stage III or above. There was no correlation between fibrotic sonographic patterns and histological stage of fibrosis (r = −0.167, P = 0.083). Besides hepatic steatosis, clinicians should be alert to the possibility of advanced necrosis-inflammation grade in interpreting a report of bright liver on gray-scale US. Gray-scale US cannot replace liver biopsy as the optimal diagnostic procedure for the prediction of hepatic steatosis and fibrosis prior to initiating therapy for CHC.