• INCLUSION CRITERIA:

Completion of a 48-week course of pioglitazone in protocol 01-DK-0130 or completion of 48-weeks of metformin in protocol 03-DK-0233.

At least 48 weeks of follow up on no thiazolidinedione therapy after completion of protocol 01-DK-0130.

At least 24-weeks follow up on no metformin theray after completion of protocol 03-DK-0233.

Written informed consent.

Patients who participated in protocol 01-DK-0130 will also have to meet the following inclusion criteria:

Demonstrated improvements in liver histology and/or serum ALT levels during the 48-week course of pioglitazone therapy in protocol 01-DK-0130.

Elevations in serum ALT levels.

Liver biopsy showing NASH with a total NASH activity score of at least 4 (of a total possible score of 16) including a score of at least 1 each for parenchyma inflammation, cellular injury and steatosis on liver biopsy taken 48 weeks after stopping pioglitazone.

Willingness to receive pioglitazone for 3 years.

Patients who participated in protocol 03-DK-0233 will also have to me the following inclusion criteria:

Demonstrated no significant improvement in liver histology and/or serum ALT levels during the 48-week course of metformin treatment in protocol 03-DK-0233.

Elevations in serum ALT levels.

Liver biopsy showing NASH with a total activity score of at least 4 (of a total possible score of 16) including a score of at least 1 each for parenchymal inflammation, cellular injury and steatosis on liver biopsy taken at the end of the 48-week course of metofrmin.

EXCLUSION CRITERIA:

Evidence of another form of liver disease (these largely will have been excluded based upon enrollment in the previous study, 01-DK-0130 and 03-DK-0233).

Hepatitis B as defined as presence of hepatitis B surface antigen (HBsAg).

Hepatitis C as defined by presence of hepatitis C virus (HCV) RNA in serum.

Autoimmune hepatitis as defined by anti-nuclear antibody (ANA) of 1:160 or greater and liver histology consistent with autoimmune hepatitis or previous response to immunosuppressive therapy.

Autoimmune cholestatic liver disorders as defined by elevation of alkaline phosphatase and anti-mitochondrial antibody of greater than 1:80 or liver histology consistent with primary biliary cirrhosis or elevation of alkaline phosphatase and liver histology consistent with sclerosing cholangitis.

e. Wilson disease as defined by ceruloplasmin below the limits of normal and liver histology consistent with Wilson disease.

Alpha-1-antitrypsin deficiency as defined by alpha-1-antitrypsin level less than normal and liver histology consistent with alpha-1-antitrypsin deficiency.

Hemochromatosis as defined by presence of 3+ or 4 iron on liver biopsy stain and homozygosity for C282Y or compound heterozygosity for C282Y/H63D.

Drug-induced liver disease as defined on the basis of typical exposure and history.

Bile duct obstruction as shown by imaging studies.

History of excess alcohol ingestion, averaging more than 30 gm/day (3 drinks per day) in the previous 10 years, or history of alcohol intake averaging greater than 10 gm/day (1 drink per day: 7 drinks per week) in the previous one year.

Contraindications to liver biopsy: platelet counts less than 75,000/mm(3) or prothrombin time greater than 16 seconds.

Decompensated liver disease, Child-Pugh score greater than or equal to 7 points.

History of gastrointestinal bypass surgery or ingestion of drugs known to produce hepatic steatosis including corticosteroids, high-dose estrogens, methotrexate, tetracycline or amiodarone in the previous 6 months.

Preexistent diabetes mellitus or the development of diabetes mellitus during the study requiring the use of another drug in addition to pioglitazone for glycaemic control. Diabetes being as defined by: fasting plasma glucose of greater than or equal to 126 mg/dl on two separate occasions, or diabetic symptoms with a random plasma glucose of greater than or equal to 200 mg/dl.

Use of anti-diabetic drugs, including insulin, biguanides, sulfonylureas, or thiazolidinediones at the time of enrollment or in the previous 48 weeks.

Significant systemic or major illnesses other than liver disease, including congestive heart failure, coronary artery disease, cerebrovascular disease, pulmonary disease, renal failure, organ transplantation, serious psychiatric disease, malignancy that, in the opinion of the investigator would preclude treatment with pioglitazone and adequate follow up.

Positive test for anti-HIV.

Active substance abuse, such as alcohol, inhaled or injection drugs within the previous one year.

Pregnancy or inability to practice adequate contraception in women of childbearing potential.

Evidence of hepatocellular carcinoma: alpha-fetoprotein levels greater than 200 ng/ml and/or liver mass on imaging study that is suggestive of liver cancer.

Any other conditions, which, in the opinion of the investigators would impede competence or compliance or possibility, hinder completion of the study.