The objective of this work is to characterize the liver ultrasound texture as it changes in diffuse disease of fatty liver. This technology could allow non-invasive diagnosis of fatty liver, a major metabolic disorder in early lactation dairy cows. More than 100 liver biopsies were taken from fourteen dairy cows, as a part of the USDA-funded study for effects of glucagon on prevention and treatment of fatty liver. Up to nine liver biopsies were taken from each cow during peripartal period of seven weeks and total lipid content was determined chemically. Just before each liver biopsy was taken, ultrasonic B-mode images were digitally captured using a 3.5 or 5 MHz transducer. Effort was made to capture images that were non-blurred, void of large blood vessels and multiple echoes, and of consistent texture. From each image, a region-of-interest of size 100-by-100 pixels was processed. Texture parameters were calculated using algorithms such as first and second order statistics, 2D Fourier transformation, co-occurrence matrix, and gradient analysis. Many cows had normal liver (3% to 6% total lipid) and a few had developed fatty liver with total lipid up to 15%. The selected texture parameters showed consistent change with changing lipid content and could potentially be used to diagnose early fatty liver non-invasively. The approach of texture analysis algorithms and initial results on their potential in evaluating total lipid percentage is presented here.