Non-alcoholic fatty liver disease (NAFLD) has become the leading cause of chronic liver diseases worldwide, causing considerable liver-related mortality and morbidity. Over the last 10years, it has also become increasingly evident that NAFLD is a multisystem disease, affecting many extra-hepatic organ systems and interacting with the regulation of multiple metabolic pathways. NAFLD is potentially involved in the aetiology and pathogenesis of type 2 diabetes via its direct contribution to hepatic/peripheral insulin resistance and the systemic release of multiple hepatokines that may adversely affect glucose metabolism and insulin action. In this updated review, we discuss the rapidly expanding body of clinical and epidemiological evidence that supports a strong link between NAFLD and the risk of developing type 2 diabetes. We also briefly examine the conventional and the more innovative pharmacological approaches for the treatment of NAFLD that may influence the risk of developing type 2 diabetes.