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Non-alcoholic fatty liver disease (NAFLD) is a common and prevalent disorder affecting 25 percent of the adults in the United States and 32 percent of adults globally. It is one of the common causes of chronic liver disease characterized by steatosis, which can lead to inflammation, fibrosis, and cirrhosis. NAFLD is strongly associated with obesity and insulin resistance. Multiple genetic variants have been consistently found to be associated with NAFLD; one of them is found in the TMC4-<i>MBOAT7</i> loci. One variant (rs641738 C>T) within <i>MBOAT7</i> encoding lysophosphatidyl inositol acyltransferase increases the risk for NAFLD development and triggers hepatic inflammation by regulating arachidonic acid levels. This review provides an overview of the <i>MBOAT7</i> gene, pathogenesis of NAFLD, understanding the regulation of <i>MBOAT7</i> and mechanistic link between <i>MBOAT7</i> and NAFLD. It further summarizes pathophysiologically relevant in vivo and in vitro studies on <i>MBOAT7</i> and challenges in treating complex NAFLD with recent progress made in the treatment of NAFLD. As such, this review provides useful information on <i>MBOAT7</i> and NAFLD interrelation, which has the potential of deciphering novel therapeutic targets rather than well-known genetic variants such as PNPLA3 and TM6SF2.