Nonalcoholic fatty liver disease (NAFLD) has emerged as the leading liver disease globally. NAFLD patients can have a progressive phenotype, non-alcoholic steatohepatitis (NASH) that could lead to cirrhosis, liver failure and cancer. There is a close bi-directional relationship between NAFLD and type 2 diabetes mellitus (T2DM); NAFLD increases the risk for T2DM and its complications whereas T2DM increases the severity of NAFLD and its complications. The large global impact of NAFLD and T2DM on healthcare systems requires a paradigm shift from specialty care to early identification and risk stratification of NAFLD in primary care and diabetes clinics. Approach to diagnosis, risk stratification and management of NAFLD is discussed. In addition to optimizing the control of coexisting cardiometabolic comorbidities, early referral of NAFLD patients at high risk of having NASH or significant fibrosis to hepatology specialist care may improve management and allow access for clinical trials. Lifestyle modifications, vitamin E, pioglitazone and metformin are currently available options that may benefit patients with T2DM and NAFLD. The burst of clinical trials investigating newer therapeutic agents for NAFLD and NASH offer hope for new, effective and safe therapies in the near future.