Diabetes mellitus (DM) and non-alcoholic fatty liver disease (NAFLD) often coexist and share underlying pathophysiological mechanisms. NAFLD encompasses a spectrum of liver conditions ranging from simple steatosis to non-alcoholic steatohepatitis (NASH) and can progress to liver fibrosis, cirrhosis, and hepatocellular carcinoma. Individuals with diabetes, especially type 2 diabetes mellitus (T2DM), are at increased risk of developing NAFLD due to insulin resistance and the associated metabolic abnormalities such as dyslipidemia and obesity. Insulin resistance promotes hepatic lipid accumulation and contributes to the pathogenesis of NAFLD by enhancing hepatic lipogenesis and suppressing fatty acid oxidation. Conversely, NAFLD exacerbates insulin resistance, creating a vicious cycle that further worsens glycemic control in diabetic patients. The presence of both conditions significantly increases the risk of cardiovascular disease and other diabetes-related complications. Management strategies include lifestyle modifications such as weight loss and physical activity, along with pharmacological interventions targeting insulin resistance and liver inflammation. Early detection and comprehensive management of both diabetes mellitus and NAFLD are crucial to mitigate their combined impact on overall health outcomes.