Nonalcoholic fatty liver disease (NAFLD) is a risk factor for type 2 diabetes. 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 over 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 type 2 diabetes (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 type 2 diabetes. Future studies are warranted to explore mechanisms and to examine DNA methylation signatures of NAFLD across racial/ethnic groups.