Background: In the past 30 years, incidences of non-alcoholic fatty liver disease (NAFLD) has risen by 30%. However, there is still no clear mechanism or accurate method of anticipating liver failure. Here we reveal the phase transitions of liquid crystalline qualities in hepatic lipid droplets (HLDs) as a novel method of anticipating prognosis. Methods: NAFLD was induced by feeding C57BL/6J mice on a high-fat (HiF) diet. These NAFLD livers were then evaluated under polarized microscopy, X-ray diffraction and small-angle scattering, lipid component chromatography analysis and protein expression analysis. Optically active HLDs from mouse model and patient samples were both then confirmed to have liquid crystal characteristics. Liver MAP1LC3A expression was then evaluated to determine the role of autophagy in liquid crystal HLD (LC-HLD) formation. Results: Unlike the normal diet cohort, HiF diet mice developed NAFLD livers containing HLDs exhibiting Maltese cross birefringence, phase transition, and fluidity signature to liquid crystals. These LC-HLDs transitioned to anisotropic crystal at 0 °C and remain crystalline. Temperature increase to 42 °C causes both liquid crystal and crystal HLDs to convert to isotropic droplet form. These isotropic HLDs successfully transition to anisotropic LC with fast temperature decrease and anisotropic crystal with slow temperature decrease. These findings were duplicated in patient liver. Patient LC-HLDs with no inner optical activity were discovered, hinting at lipid saturation as the mechanism through which HLD acquire LC characteristics. Downregulation of MAP1LC3A in conjunction with increased LC-HLD also implicated autophagy in NAFLD LC-HLD formation. Conclusions: Increasing concentrations of amphiphilic lipids in HLDs favors organization into alternating hydrophilic and hydrophobic layers, which present as LC-HLDs. Thus, evaluating the extent of liquid crystallization with phase transition in HLDs of NAFLD patients may reveal disease severity and predict impending liver damage.