Introduction: Hepatic steatosis has emerged as an important histological finding in patients with deranged liver function. It may be an important factor for the progression of hepatitis C virus-associated liver disease, particularly in genotype 3 infections. Aims: To determine the etiology and impact of hepatic steatosis in our patients presenting with chronic hepatitis. Methods: All liver biopsies performed at our hospital during 2010-2014 were analyzed by a single pathologist using histological activity index (HAI) scores and Brunt’s classification for steatosis. Patients were evaluated for factors reported to be associated with steatosis, including the prevalence of HCV. Results: Biopsies of 439 patients (284 male, mean ages 38.5 ± 11.2 years) were studied. Hepatic steatosis was present in 324 (73.8%) biopsies. It was mild in 190/439 (43.3%), moderate in 88/439 (20%) and severe in 46/439 (10.5%) cases. On univariate analysis, steatosis was associated with HCV infection (p=0.023), BMI >25 (p=0.008) and raised ALT (p=0.003), but not with diabetes, hypertriglyceridemia, HBV infection or alcohol intake. On multiple logistic regression HCV and BMI >25 were independent risk factors for steatosis. There was a linear ascending association of hepatic steatosis with grade and stage of liver disease (p ≤ 0.001). Among 369 HCV patients, 280 (76%) had steatosis. It was mild in 159/369 (43%), moderate in 82/369 (22.2%) and severe in 39/369 (10.6%) cases. There were only 32 non-alcoholic, non-viral hepatitis patients and 8/32 (25%) had moderate or severe steatosis. Conclusions: Significant hepatic steatosis is present in 30.5% of our patients with chronic hepatitis. HCV genotype 3 infection is the predominant factor for hepatic steatosis in Pakistan. Steatosis has a linear ascending correlation with hepatic inflammation and fibrosis.