Nonalcoholic fatty liver disease (NAFLD) is a heterogeneous group of liver diseases characterized by the accumulation of fat in the liver. The heterogeneity of NAFLD is reflected in a clinical and histologic spectrum where some patients develop isolated steatosis of the liver, termed nonalcoholic fatty liver, whereas others develop hepatocyte injury, ballooning, inflammation, and consequent fibrosis, termed nonalcoholic steatohepatitis (NASH). Systemic insulin resistance is a major driver of hepatic steatosis in NAFLD. Lipotoxicity of accumulated lipids along with activation of the innate immune system are major drivers of NASH. Lipid‐induced sublethal and lethal stress culminates in the activation of inflammatory processes, such as the release of proinflammatory extracellular vesicles and cell death. Innate and adaptive immune mechanisms involving macrophages, dendritic cells, and lymphocytes are central drivers of inflammation that recognize damage‐ and pathogen‐associated molecular patterns and contribute to the progression of the inflammatory cascade. While the activation of the innate immune system and the recruitment of proinflammatory monocytes into the liver in NASH are well known, the exact signals that lead to this remain less well defined. Further, the contribution of other immune cell types, such as neutrophils and B cells, is an area of intense research. Many host factors, such as the microbiome and gut–liver axis, modify individual susceptibility to NASH. In this review, we discuss lipotoxicity, inflammation, and the contribution of interorgan crosstalk in NASH pathogenesis.