AIM: To evaluate whether intrahepatic fat accumulation contributes to impaired insulin clearance and hepatic insulin resistance across different ethnic groups. METHODS: The intrahepatic fat content (HFF%) was quantified by magnetic resonance imaging in a multi-ethnic cohort of 632 obese youths aged 7-18 years at baseline and after a 2-year follow-up. Insulin secretion rate (ISR), endogenous insulin clearance (EIC) and hepatic insulin resistance index (HIRI) were estimated by modelling glucose, insulin and C-peptide data during 3-hour, 9-point oral glucose tolerance tests. RESULTS: African American youths exhibited the lowest HFF% and a prevalence of non-alcoholic fatty liver disease (NAFLD) less than half of that shown by Caucasians and Hispanics. Furthermore, African Americans had lower EIC and glucose-stimulated ISR, despite similar HIRI and plasma insulin levels, compared with Caucasians and Hispanics. EIC and HIRI were markedly reduced in individuals with NAFLD and declined across group-specific HFF% tertiles in all ethnic groups. Consistently, the HFF% correlated with EIC and HIRI, irrespective of the ethnic background, after adjustment for age, sex, ethnicity, adiposity, waist-hip ratio, pubertal status and plasma glucose levels. An increased HFF% at follow-up was associated with decreased EIC and increased HIRI across all groups. CONCLUSIONS: Intrahepatic lipid accumulation is associated with reduced insulin clearance and hepatic insulin sensitivity in obese youths, irrespective of their ethnic background.