Nonalcoholic fatty liver disease (NAFLD) is an increasingly recognized cause of liver disease worldwide. With obesity being a universally important risk factor, NAFLD is now receiving greater attention as a public health issue, and the burden of NAFLD is expected to increase in years to come. The prevalence of NAFLD among subjects with diabetes and with severe obesity is on the rise around the world, including in Saudi Arabia. Efforts in developing new strategies for its prevention, diagnosis and management are needed to alter the course of this disease. The purpose of this review is to enhance awareness about the close interrelationship between NAFLD and type 2 diabetes mellitus and recent diagnostic and treatment advances in the field.