To establish the accuracy of ultrasonography in assessing diffuse parenchymal liver disease we performed a prospective comparative study with histology in 50 patients with a wide range of liver disease. Liver biopsy was performed within 24 h of the ultrasound examination and ultrasonography was performed by a single operator who was unaware of clinical details of the patients. Histology was reviewed blind and the degree of steatosis graded mild, moderate or severe while increased portal fibrous tissue was graded mild, moderate or established cirrhosis. Thirty-six patients had steatosis and 31 patients had increased fibrous tissue on histology. Ultrasonography correctly identified steatosis in 32/36 (89%) patients including all patients with the severe grade. Increased fibrous tissue was correctly identified in 24/31 (77%) with a sensitivity of 100% in patients with moderate fibrosis and established cirrhosis. Specificity was 93% for steatosis and 89% for increased fibrous tissue. These results show that ultrasonography can provide a non-invasive prediction of liver histology which in moderate and severe steatosis and advanced fibrosis can be both highly sensitive and specific.