Common genetic variants of the fat mass and obesity associated (FTO) gene are strongly associated with obesity and type 2 diabetes. FTO is ubiquitously expressed, but appears to have tissue-specific roles. Earlier studies have focused on the role of hypothlamic FTO in the regulation of metabolism. However, it appears that FTO plays a role in the regulation of metabolism in a tissue-specific manner. Recent studies suggest that expression of hepatic FTO is regulated by metabolic signals such as nutrients and hormones and altered FTO levels in liver affects glucose and lipid metabolism. This review outlines recent findings on hepatic FTO in the regulation of metabolism, with particular focus on hepatic glucose and lipid metabolism. It is proposed that abnormal activity of hepatic signaling pathways involving FTO links metabolic impairments such as obesity, type 2 diabetes and nonalcoholic fatty liver disease (NAFLD). Therefore, a better understanding of these pathways may lead to therapeutic approaches to treat these metabolic diseases by targeting hepatic FTO. The overall goal of this review is to place FTO within the context of hepatic regulation of metabolism.