Background: To evaluate the prevalence of suspected nonalcoholic fatty liver disease (NAFLD) in young children with obesity and determine associated risk factors. Methods: Retrospective single-center study of children with obesity, ages 2-6 years. Suspected NAFLD was defined as an alanine aminotransferase (ALT) >30 U/L. Multivariable analyses were performed to determine predictors of elevated ALT. Results: Among 237 children 2-6 years old, 35% had elevated ALT. Multivariable analysis showed that higher BMI z score [odds ratio (OR): 1.5 confidence interval (95% CI: 1.04-1.92)] and higher gamma-glutamyl transferase (GGT) [OR: 21.3 (95% CI: 3.7-121.1)] predicted elevated ALT. Of those with ≥2 ALT levels, 38% (n = 33/86) had a persistently elevated ALT (median ALT >30 U/L). Only 7% of patients with ALT >30 U/L underwent further testing to evaluate for alternative causes of liver disease. Conclusion: Suspected NAFLD is common in young children with obesity and predicted by obesity severity and GGT. Other cardiometabolic markers were equivalent between those with normal vs. elevated ALT, suggesting NAFLD onset may precede development of comorbidities. Earlier screening will enable prompt diagnosis and intervention, which may prevent or delay the onset of cardiometabolic diseases commonly associated with NAFLD in adolescence and adulthood.