An outboard motor includes a lower unit and an upper unit that is attachable to the stern of a boat, with the upper unit and lower unit configured to tilt together about a transverse tilt axis. The upper unit includes an engine, a transmission assembly and a drive shaft and the lower unit includes a lower unit housing and a propeller shaft that is connected to the drive shaft. The lower unit housing is configured to pivot relative to the upper unit, about a steering axis that extends coaxially with the drive shaft. The steering axis intersects the propeller axis at an obtuse angle.