Fibroblast growth factor 21 (FGF21) is a peptide hormone predominantly secreted by the liver and plays a crucial role in maintaining whole-body energy metabolism and regulating insulin sensitivity. A large number of clinical studies have demonstrated that serum FGF21 levels are increased in obese patients with non-alcoholic fatty liver disease (NAFLD), and high circulating FGF21 is a sensitive biomarker for predicting the onset and progression of NAFLD. Injection of exogenous FGF21 can effectively alleviate pathological process in both animal models and NAFLD patients. This review aims to describe the molecular mechanism underlying the hepatoprotective effects of FGF21; to summarize the current data and challenges of the clinical trials on FGF21 analogs and receptor agonists in the treatment of NAFLD and nonalcoholic steatohepatitis (NASH); and to speculate the future directions of FGF21 as a diagnosis and treatment for NAFLD.