The degree of fat deposition in muscle and its implications for obesity-related complications in youth are not well understood. One hundred and fifty-nine patients (mean age: 13.3 years; range: 6-20) with a body mass index (BMI) >90th percentile for age and sex were included. Muscle fat content (MFC) was measured in the psoas muscle by proton magnetic resonance spectroscopy. The patients were assigned to two groups: MFC <5% or ³5%. Visceral adipose tissue volume (VAT) and subcutaneous adipose tissue volume (SAT) were measured by magnetic resonance imaging. Blood samples were obtained from 119 patients, and liver enzyme concentrations and other variables were measured. The data were analysed to detect any associations between MFC and BMI standard deviation scores, VAT and SAT, blood values, and physical activity levels. The mean BMI standard deviation score (SDS) was 3.04 (range 1.32-5.02). The mean MFC was 8.9% (range 0.8-46.7), and 118 (74.2%) of 159 patients had an MFC ³5%. Children with a high MFC had a higher BMI SDS (P=0.03) and had a higher VAT, but not SAT or SAT/VAT ratio. Both intramyocellular lipid (IMCL) and extramyocellular lipid (EMCL) content were elevated in patients with an MFC ³5%. Blood values and physical activity levels did not differ between the two groups. Severely obese children and adolescents tend to have a high MFC, which is associated with elevated VAT and IMCL and EMCL content. An increased MFC may be associated with impaired metabolic processes, which may predispose young people to obesity-related complications.