In adults with mild type 2 diabetes, a eucaloric ketogenic diet (approximately 9% of energy from carbohydrates, 65% from fat) consumed over 12 weeks is associated with a 28% reduction in liver fat compared to a eucaloric low-fat diet (approximately 55% of energy from carbohydrates, 20% from fat), suggesting that carbohydrate restriction may improve hepatic steatosis.

When carbs are very low, the liver makes less fat and starts burning fat for energy instead. This happens because the body produces less insulin and more glucagon, which turns off fat-making enzymes and turns on fat-burning pathways. The liver runs out of a key molecule needed to process fat into energy, so it redirects fat pieces to make ketones instead. This clears fat out of the liver and into the bloodstream as fuel.