Background: Intestinal failure (IF)–associated liver disease (IFALD) is the major cause of mortality in IF. The link between intestinal microbiota and IFALD is unclear. Methods: We compared intestinal microbiota of patients with IF (n = 23) with healthy controls (n = 58) using culture-independent phylogenetic microarray analysis. The microbiota was related to histological liver injury, fecal markers of intestinal inflammation, matrix metalloproteinase 9 and calprotectin, and disease characteristics. Results: Overabundance of Lactobacilli, Proteobacteria, and Actinobacteria was observed in IF, whereas bacteria related to Clostridium clusters III, IV, and XIVa along with overall diversity and richness were reduced. Patients were segregated into 3 subgroups based on dominating bacteria: Clostridium cluster XIVa, Proteobacteria, and bacteria related to Lactobacillus plantarum. In addition to liver steatosis and fibrosis, Proteobacteria were associated with prolonged current parenteral nutrition (PN) as well as liver and intestinal inflammation. Lactobacilli were related to advanced steatosis and fibrosis mostly after weaning off PN without associated inflammation. In multivariate permutational analysis of variance, liver steatosis, bowel length, PN calories, and antibiotic treatment best explained the microbiota variation among patients with IF. Conclusions: Intestinal microbiota composition was associated with liver steatosis in IF and better predicted steatosis than duration of PN or length of the remaining intestine. Our results may be explained by a model in which steatosis is initiated during PN in response to proinflammatory lipopolysaccharides produced by Proteobacteria and progresses after weaning off PN, as the L plantarum group Lactobacilli becomes dominant and affects lipid metabolism by altering bile acid signaling.