Hepatic steatosis and liver degeneration are prominent features of the zebrafish ducttrip (dtp) mutant phenotype. Positional cloning identified a causative mutation in the gene encoding S-adenosylhomocysteine hydrolase (Ahcy). Reduced Ahcy activity in dtpmutants led to elevated levels of S-adenosylhomocysteine (SAH) and, to a lesser degree, of its metabolic precursor S-adenosylmethionine (SAM). Elevated SAH in dtp larvae was associated with mitochondrial defects and increased expression of tnfa and pparg, an ortholog of the mammalian lipogenic gene. Antisense knockdown of tnfa rescued hepatic steatosis and liver degeneration in dtp larvae, whereas the overexpression of tnfa and the hepatic phenotype were unchanged in dtp larvae reared under germ-free conditions. These data identify an essential role for tnfa in the mutant phenotype and suggest a direct link between SAH-induced methylation defects and TNF expression in human liver disorders associated with elevated TNFα. Although heterozygous dtp larvae had no discernible phenotype, hepatic steatosis was present in heterozygous adult dtp fish and in wild-type adult fish treated with an Ahcy inhibitor. These data argue that AHCYpolymorphisms and AHCY inhibitors, which have shown promise in treating autoimmunity and other disorders, may be a risk factor for steatosis,particularly in patients with diabetes, obesity and liver disorders such as hepatitis C infection. Supporting this idea, hepatic injury and steatosis have been noted in patients with recently discovered AHCY mutations.