Genetic predisposition and unhealthy lifestyle are risk factors for nonalcoholic fatty liver disease (NAFLD). We investigated whether the genetic risk of NAFLD is modified by physical activity, muscular fitness, and/or adiposity. In up to 242,524 UK Biobank participants without excessive alcohol intake or known liver disease, we examined cross-sectional interactions and joint associations of physical activity, muscular fitness, body mass index (BMI), and a genetic risk score (GRS) with alanine aminotransferase (ALT) levels and the proxy definition for suspected NAFLD of ALT levels > 30 U/L in women and >40 U/L in men. Genetic predisposition to NAFLD was quantified using a GRS consisting of 68 loci known to be associated with chronically elevated ALT. Physical activity was assessed using accelerometry, and muscular fitness was estimated by measuring handgrip strength. We found that increased physical activity and grip strength modestly attenuate genetic predisposition to elevation in ALT levels, whereas higher BMI markedly amplifies it (all p values < 0.001). Among those with normal weight and high level of physical activity, the odds of suspected NAFLD were 1.6-fold higher in those with high versus low genetic risk (reference group). In those with high genetic risk, the odds of suspected NAFLD were 12-fold higher in obese participants with low physical activity versus those with normal weight and high physical activity (odds ratio for NAFLD = 19.2 and 1.6, respectively, vs. reference group). Conclusion: In individuals with high genetic predisposition for NAFLD, maintaining a normal body weight and increased physical activity may reduce the risk of NAFLD.