Background. The aim of this study was to investigate the relationship between metabolic syndrome (MS) and nonalcoholic fatty liver disease (NAFLD) in obese children. One hundred and twenty-five subjects aged 11-12 years old participated in the study. Methods. Anthropometric and biochemical indices were measured, including lipid and liver profile, blood glucose, serum insulin, and liver ultrasound. Results. Forty-four children (58.6%) were found to have MS. Insulin resistance was present in 78 (62.4%) children. Patients with MS were more likely to have NAFLD (P<0.001). Children with NAFLD had significantly higher body mass index, waist circumference, triglycerides, fasting insulin, and lower high-density lipoprotein compared to patients with normal livers (P<0.001). Insulin resistance was significantly higher in children with NAFLD (P<0.001). Obese children presenting with MS were 3.01 (2.87–3.57, P<0.002) times more likely to develop NAFLD compared to those without metabolic syndrome after adjustment of cofounders. Conclusions. Obese children with MS have a higher risk of developing NAFLD. Weight management and early prevention should be the first line of treatment to prevent any possible health issues later on.