Advanced non-alcoholic fatty liver disease (NAFLD) is a rapidly emerging global health problem associated with pre-disposing genetic polymorphisms, most strikingly an isoleucine to methionine substitution in patatin-like phospholipase domain-containing protein 3 (PNPLA3-I148M). Here, we study how human hepatocytes with PNPLA3 148I and 148M variants engrafted in the livers of chimeric mice respond to hypercaloric diets. As early as 4 weeks, mice developed dyslipidemia, impaired glucose tolerance, and steatohepatitis selectively in the human graft, followed by pericellular fibrosis after 8 weeks of hypercaloric feeding. The PNPLA3 148M variant, either from a homozygous 148M human donor or overexpressed in a homozygous 148I donor background, caused microvesicular and more severe steatosis. In these livers hepatocytes displayed frequent ballooning degeneration, resulting in more active steatohepatitis than in 148I livers. We conclude that PNPLA3 148M in human hepatocytes exacerbates NAFLD. These models will facilitate mechanistic studies into human genetics associated with advanced fatty liver diseases.