Lifestyle intervention is the only established therapy for non-alcoholic fatty liver disease (NAFLD). The optimal treatment schedule and predictors of response of this treatment have not been established in children. We aimed to evaluate the 2-year efficacy of an inpatient versus ambulatory intensive lifestyle intervention for treating NAFLD in children with severe obesity.A cohort study of 51 severely obese non-diabetic children (mean age 14.7 (?2.4) years; BMI-z-score 3.5 (?0.5)) with liver steatosis were non-randomly allocated to inpatient treatment (2 or 6 months), ambulatory treatment or usual care. Proton Magnetic Resonance Spectroscopy determined liver steatosis and serum alanine aminotransferase (ALT) at 6 months were the primary outcome measures. Baseline variables were evaluated as predictors of treatment response.Liver steatosis had disappeared in 43, 29 and 22% and serum ALT normalized in 41, 33 and 6% at the end of 6 months in the inpatient, ambulatory or usual care treatment groups, respectively. Only the proportions of ALT normalization in inpatient and ambulatory treatment compared with usual care were significantly higher. Treatment effects of inpatient and ambulatory treatment were sustained at 1.5 years follow-up. No baseline characteristic, including PNPLA3 polymorphism or leptin, was consistently predictive for treatment response.A 6-month intensive inpatient and ambulatory lifestyle treatment in children with severe obesity reverses NAFLD in a minority of patients. This study suggests that inpatient compared with ambulatory intensive treatment does not importantly increase treatment success. Further efforts to optimize and individualize lifestyle interventions and additional treatments options are needed particular for children with severe obesity resistant to conventional lifestyle interventions.