Background & Aims Diagnostic criteria for metabolic associated fatty liver disease (MAFLD) have been proposed, but not validated. We aimed to compare the diagnostic accuracy of the MAFLD definition vs the existing NAFLD criteria to identify patients with significant fibrosis and to characterize the impact of mild alcohol intake. Methods We enrolled 765 Japanese patients with fatty liver (median age 54 years). MAFLD and NAFLD were diagnosed in 79.6% and 70.7% of patients respectively. Significant fibrosis was defined by FIB‐4 index ≥1.3 and liver stiffness ≥6.6 kPa using shear wave elastography. Mild alcohol intake was defined as <20 g/day. Factors associated with significant fibrosis were analysed by logistic regression and decision‐tree analyses. Results Liver stiffness was higher in MAFLD compared to NAFLD (7.7 vs 6.8 kPa, P = .0010). In logistic regression, MAFLD (OR 4.401; 95% CI 2.144‐10.629; P < .0001), alcohol intake (OR 1.761; 95% CI 1.081‐2.853; P = .0234), and NAFLD (OR 1.721; 95%CI 1.009‐2.951; P = .0463) were independently associated with significant fibrosis. By decision‐tree analysis, MAFLD, but not NAFLD or alcohol consumption was the initial classifier for significant fibrosis. The sensitivity for detecting significant fibrosis was higher for MAFLD than NAFLD (93.9% vs 73.0%). In patients with MAFLD, even mild alcohol intake was associated with an increase in the prevalence of significant fibrosis (25.0% vs 15.5%; P = .0181). Conclusions The MAFLD definition better identifies a group with fatty liver and significant fibrosis evaluated by non‐invasive tests. Moreover, in patients with MAFLD, even mild alcohol consumption is associated with worsening of hepatic fibrosis measures.