Nonalcoholic fatty liver disease (NAFLD) is a risk factor for type 2 diabetes (T2D). We aimed to identify the peripheral blood DNA methylation signature of hepatic fat. We conducted epigenome-wide association studies of hepatic fat in 3,400 European ancestry (EA) participants and in 401 Hispanic ancestry and 724 African ancestry participants from four population-based cohort studies. Hepatic fat was measured using computed tomography or ultrasound imaging and DNA methylation was assessed at >400,000 cytosine-guanine dinucleotides (CpGs) in whole blood or CD14+ monocytes using a commercial array. We identified 22 CpGs associated with hepatic fat in EA participants at a false discovery rate <0.05 (corresponding P = 6.9 × 10−6) with replication at Bonferroni-corrected P < 8.6 × 10−4. Mendelian randomization analyses supported the association of hypomethylation of cg08309687 (LINC00649) with NAFLD (P = 2.5 × 10−4). Hypomethylation of the same CpG was also associated with risk for new-onset T2D (P = 0.005). Our study demonstrates that a peripheral blood–derived DNA methylation signature is robustly associated with hepatic fat accumulation. The hepatic fat–associated CpGs may represent attractive biomarkers for T2D. Future studies are warranted to explore mechanisms and to examine DNA methylation signatures of NAFLD across racial/ethnic groups.