Summary Background Screening overweight and obese children for non‐alcoholic fatty liver disease (NAFLD) is recommended by paediatric and endocrinology societies. However, gastroenterology societies have called for more data before making a formal recommendation. Aim To determine whether the detection of suspected NAFLD in overweight and obese children through screening in primary care and referral to paediatric gastroenterology resulted in a correct diagnosis of NAFLD. Methods Information generated in the clinical evaluation of 347 children identified with suspected NAFLD through screening in primary care and referral to paediatric gastroenterology was captured prospectively. Diagnostic outcomes were reported. The diagnostic performance of two times the upper limit of normal (ULN) for alanine aminotransferase (ALT) was assessed. Results Non‐alcoholic fatty liver disease was diagnosed in 55% of children identified by screening and referral. Liver disease other than NAFLD was present in 18% of those referred. Autoimmune hepatitis was the most common alternative diagnosis. Children with NAFLD had significantly (P < 0.05) higher screening ALT (98 ± 95) than children with liver disease other than NAFLD (86 ± 74). Advanced fibrosis was present in 11% of children. For the diagnosis of NAFLD, screening ALT two times the clinical ULN had a sensitivity of 57% and a specificity of 71%. Conclusions Screening of overweight and obese children in primary care for NAFLD with referral to paediatric gastroenterology has the potential to identify clinically relevant liver pathology. Consensus is needed on how to value the risk and rewards of screening and referral, to identify children with liver disease in the most appropriate manner.