A quantitative graduation system based on Grey Relational Analysis is proposed to recognize fatty livers in B-scan ultrasonic images. We evaluated ultrasonography liver images from 95 subjects having fatty livers (Grade I, II, III) and 45 normal subjects, as diagnosed by an expert radiologist. In practice, ultrasonographical findings of fatty liver are based on the brightness level of the liver in comparison to the renal parenchyma. The development of a non-invasive and accurate method would be of great clinical value as an alternative to diagnosing fatty liver based on the radiologist's visual perception. In this study, we also evaluated AST and ALT liver enzymes for fatty liver having different grades. A high correlation between enzymes and Grey Relational Grades were found. The Receiver Operating Characteristic (ROC) curves were obtained and yielded satisfactory classification results using sensitivity, specificity and area under the curve for computing graduation and distinguishing fatty livers from healthy livers. With the proposed method based on Grey Relational Analysis, not only misdiagnosis caused by subjective differences in clinical evaluation will be reduced, but also the early diagnosis fatty liver and quantitative assessment of its degree will be achieved.