Transplantation of a fatty liver is associated with a higher incidence of primary non-function of the graft. Indocyanine green (ICG) has been used for assessing hepatic dysfunction but not for quantifying liver steatosis. New Zealand white rabbits were fed a normal diet (group A) or a high-cholesterol (2%) diet for 4, 8, and 12 weeks in groups B, C, and D, respectively. Laparotomy was performed for liver exposure. Hepatic artery, portal vein, and total blood flow, hepatic microcirculation, portal pressure, liver function parameters, and blood cholesterol levels were measured. The hepatic ICG concentration was measured using near-infrared spectroscopy, and its uptake and excretion rates were calculated. The severity of steatosis was assessed from liver biopsy specimens by a semiquantitative grading system. Cholesterol feeding resulted in mild steatosis after 4 weeks and in moderate steatosis after 8 and 12 weeks. Mild steatosis was associated with insignificant changes in haemodynamic parameters, liver function, and ICG handling as compared with controls. Moderate steatosis caused a significant reduction in portal and total hepatic blood flow and microcirculation with a significant increase in hepatic artery flow and portal pressure. These haemodynamic changes were associated with a significant alteration in liver function tests. With moderate steatosis, ICG uptake and excretion were significantly reduced. The ICG uptake rate significantly correlated with total blood flow and microcirculation. The ICG excretion rate significantly correlated with the changes in bilirubin, liver enzymes, and albumin. Direct ICG quantification by near-infrared spectroscopy could be used to assess the severity of hepatic steatosis by reflecting impaired parenchymal perfusion and liver dysfunction.