Neonatal hepatic steatosis (OMIM 228100) is a fatal condition of unknown etiology characterized by a pale and yellow liver and early postnatal mortality. In the present study, a deficit in adenosine-dependent metabolism is proposed as a causative factor. Physiologically, adenosine is efficiently metabolized to AMP by adenosine kinase (ADK), an enzyme highly expressed in liver. ADK not only ensures normal adenine nucleotide levels but also is essential for maintaining S-adenosylmethionine-dependent transmethylation processes, where adenosine, an obligatory product, has to be constantly removed. Homozygous Adk^−/− mutants developed normally during embryogenesis. However, within 4 days after birth they displayed microvesicular hepatic steatosis and died within 14 days with fatty liver. Adenine nucleotides were decreased and S-adenosylhomocysteine, a potent inhibitor of transmethylation reactions, was increased in the mutant liver. Thus, a deficiency in adenosine metabolism is identified as a powerful contributor to the development of neonatal hepatic steatosis, providing a model for the rapid development of postnatally lethal fatty liver.