Background: Non-alcoholic fatty liver disease (NAFLD) is by far the commonest cause of chronic liver disease in the developed countries. In type 2 diabetes mellitus (T2DM), NAFLD has even more aggressive course and can result in early onset chronic liver disease. Although biopsy remains the gold standard for diagnosing NAFLD, many noninvasive tests such as liver ultrasound can give a clue about the severity of the disease. This study was conducted to determine NAFLD prevalence in patients with T2DM using liver ultrasound and determine its association with the body mass index and other biochemical markers (such as liver transaminases, glycated hemoglobin HbA1c, and lipid profile).Methods: This cross-sectional study was carried out at Azadi General Teaching Hospital from January to September 2019. All the involved patients were known to have T2DM. After being consented, their body mass index (BMI) was determined, and patients were classified into mild, moderate, and severe fatty liver based on ultrasonographic criteria. Then, the biochemical blood measurements were performed by a standard laboratory procedure to determine their lipid profile, liver transaminases, and glycated hemoglobin levels.Results: One hundred thirty diabetic patients were involved in the study. Around 55% were overweight, and 34% were obese. Fatty liver was seen in 53.7% (74 patients). Among these, mild, moderate and severe NAFLD was seen in 79.9%, 17.7% and 4.35%, respectively. Fatty liver diabetics had a mean BMI of 32.09% vs. 27.59% for patients with non-fatty liver. The average mean HbA1c, triglyceride and GPT levels in fatty liver and non fatty liver diabetics were 8.37 % vs. 7.82 %, 200mg/dl vs. 150mg/dl and 24.4 IU/L vs. 20.4 IU/L, respectively.Conclusion: The overall prevalence of NAFLD among type 2 diabetes mellitus patients is significantly high. Elevated GPT, triglyceride and HbA1c levels may correlate with the development of NAFLD in diabetic patients.