BACKGROUND & AIMS Hepatocellular ballooning is a key finding in nonalcoholic steatohepatitis (NASH). It is conventionally defined by hemotoxylin and eosin (H&E) staining showing enlarged cells with rarefied cytoplasm and recently by changes in the cytoskeleton. Fat droplets are emerging as important organelles in cell metabolism. To address a possible relation between fat droplets and ballooning, we studied fat staining, H&E, and keratin 18 staining in human NASH. METHODS Sequential staining and high resolution imaging were used to study freshly prepared cryo-sections from 10 patients with histologically confirmed steatohepatitis using oil red O for fat droplet identification, H&E to identify ballooning, and anti-K18 to confirm cytoskeletal changes. High resolution images were captured at each stage using the Aperio Scanscope. To provide ultrastructural correlation, glutaraldehyde-fixed specimens were studied using transmission electron microscopy (TEM) with serial sectioning for localization of ballooned cells by light microscopy and TEM in identical specimens. RESULTS Serial staining consistently demonstrated that hepatocellular ballooning is associated with fat droplet accumulation evident by oil red O positivity and depletion of cytoplasmic keratin 18 with K-18 positive Mallory-Denk bodies (MDB). TEM confirmed the association between osmium stained fat droplets, MDB formation, and cellular enlargement and suggested droplet-associated dilation of the endoplasmic reticulum. CONCLUSIONS These results indicate a relationship between cellular ballooning, fat droplet accumulation, and cytoskeletal injury in NASH. We speculate that injury to multiple, organelles including fat droplets and endoplasmic reticulum, contribute to this characteristic finding.