Adipose tissue dysfunction is involved in the development of insulin resistance and is responsible for excessive lipid delivery to other organs such as the liver. We tested the hypothesis that impaired mitochondrial function is a common feature of subcutaneous (SAT) and visceral adipose tissue (VAT), but may differently contribute to adipose tissue insulin resistance (IR) in obesity, non-alcoholic fatty liver (NAFL) and steatohepatitis (NASH). In this cross-sectional study, we analyzed tissue-specific insulin sensitivity using stable isotope dilution and hyperinsulinemic-normoglycemic clamp tests. We also assessed mitochondrial respiration, mRNA and protein expression, and tissue morphology in biopsies of SAT and VAT from obese humans without NAFL, with NAFL or with NASH (n = 22/group). Compared to individuals without liver disease, persons with NAFL and NASH had about 30% (p = 0.010) and 33% (p = 0.002) lower maximal mitochondrial respiration, respectively, in VAT, but not in SAT. The lower maximal mitochondrial respiration of VAT was associated with lower adipose tissue insulin sensitivity (β = 0.985, p = 0.041) and with increased VAT protein expression of tumor necrosis factor A across all groups (β = -0.085, p = 0.040). VAT from individuals with NASH was characterized by lower expression of oxidative phosphorylation complex IV (p = 0.042) and higher mRNA expression of the macrophage marker CD68 (p = 0.002) than VAT from participants without NAFL. Humans with non-alcoholic fatty liver disease have distinct abnormalities of VAT energy metabolism, which correlate with adipose tissue dysfunction and may favor progression of NAFL to NASH. Adipose tissue (commonly called body fat) can be found under the skin (subcutaneous) or around internal organs (visceral). Dysfunction of adipose tissue can cause insulin resistance and lead to excess delivery of fat to other organs such as the liver. Herein, we show that dysfunction specifically in visceral adipose tissue was associated with fatty liver disease. NCT01477957.