Steatotic liver disease (SLD), particularly metabolic dysfunction-associated SLD, represents a significant public health concern worldwide. Among the various factors implicated in the development and progression of this condition, the patatin-like phospholipase domain-containing protein 3 (PNPLA3 ) gene has emerged as a critical player. Variants of PNPLA3 are associated with altered lipid metabolism, leading to increased hepatic fat accumulation and subsequent inflammation and fibrosis. Understanding the role of PNPLA3 not only enhances our comprehension of the pathomechanisms driving SLD but also informs potential therapeutic strategies. The molecular mechanisms through which PNPLA3 variants contribute to lipid dysregulation and hepatocyte injury in SLD are critically discussed in the present review article. We extensively analyze clinical cohorts and population-based studies underpinning the association between PNPLA3 polymorphisms and the risk of developing SLD, and its liver-related and protean extrahepatic outcomes, in concert with other risk modifiers, notably including age, sex, and ethnicity in adults and children. We also discuss the increasingly recognized role played by the PNPLA3 gene in liver transplantation, autoimmune hepatitis, and acquired immunodeficiency syndrome. Finally, we examine the clinical implications of PNPLA3 diagnostics regarding risk stratification and targeted therapies for patients affected by SLD in the context of precision medicine approaches.