Nonalcoholic fatty liver disease (NAFLD) is characterized by excess lipid accumulation that can progress to inflammation (nonalcoholic steatohepatitis, NASH), and fibrosis. Serum β-hydroxybutyrate (β-HB), a product of the ketogenic pathway, is commonly used as a surrogate marker for hepatic fatty acid oxidation (FAO). However, it remains uncertain whether this relationship holds true in the context of NAFLD in humans. We compared fasting serum β-HB levels with direct measurement of liver mitochondrial palmitate oxidation in humans stratified based on NAFLD severity (n = 142). Patients were stratified based on NAFLD activity score (NAS): NAS = 0 (no disease), NAS = 1-2 (mild), NAS = 3-4 (moderate), and NAS ≥ 5 (advanced). Moderate and advanced NAFLD is associated with reductions in liver 3-hydroxy-3-methylglutaryl-CoA synthase 2 (HMGCS2), serum β-HB, but not 3-hydroxy-3-methylglutaryl-CoA lyase (HMGCL) mRNA, relative to no disease. Worsening liver mitochondrial complete palmitate oxidation corresponded with lower HMGCS2 mRNA but not total (complete + incomplete) palmitate oxidation. Interestingly, we found that liver HMGCS2 mRNA and serum β-HB correlated with liver mitochondrial β-hydroxyacyl-CoA dehydrogenase (β-HAD) activity and CPT1A mRNA. Also, lower mitochondrial mass and markers of mitochondrial turnover positively correlated with lower HMGCS2 in the liver. These data suggest that liver ketogenesis and FAO occur at comparable rates in individuals with NAFLD. Our findings support the utility of serum β-HB to serve as a marker of liver injury and hepatic FAO in the context of NAFLD.NEW & NOTEWORTHY Serum β-hydroxybutyrate (β-HB) is frequently utilized as a surrogate marker for hepatic fatty acid oxidation; however, few studies have investigated this relationship during states of liver disease. We found that the progression of nonalcoholic fatty liver disease (NAFLD) is associated with reductions in circulating β-HB and liver 3-hydroxy-3-methylglutaryl-CoA synthase 2 (HMGCS2). As well, decreased rates of hepatic fatty acid oxidation correlated with liver HMGCS2 mRNA and serum β-HB. Our work supports serum β-HB as a potential marker for hepatic fatty acid oxidation and liver injury during NAFLD.