Introduction: Non-alcoholic fatty liver disease (NAFLD) has become a public health problem worldwide due to rising incidence of obesity and Type 2 diabetes mellitus. NAFLD is a common liver disorder that is strongly associated with insulin resistance and Type 2 diabetes mellitus. As a result of epidemic increase in hypertension, obesity, hypertriglyceridemia along with diabetes mellitus, prevalence of NAFLD and metabolic syndrome have increased globally. Objective: The aim of this study was designed to determine the proportion of NAFLD and metabolic syndrome in T2DM patients. Methodology: This was a cross sectional descriptive study conducted in medicine department, Rajshahi medical college, Rajshahi among ninety one T2DM patients. Abdominal ultrasonography for NAFLD detection and grading as well as measurement of blood pressue, BMI, waist circumference, HbA1c, lipid profile, liver function tests were done. All data were analysed by SPSS 16 and p value <0.05 was assumed as statistically significant in this study. Results: Out of ninety one DM patients 2/3rd (67%) were male and remaining 1/3rd (33%) were female. Mean age of them was 51.43±6.24 years. Among study population 80.2% were obese, 31.8 were hypertensive and 72.5% had hypertriglyceridemia. Proportion of NAFLD and metabolic syndrome in T2DM patients was 60.4% and 61.5% respectively. 52.7% had mild whereas 47.3% had moderate fatty change in liver. Female had proportionately higher NAFLD than male. It was also observed that NAFLD was proportionately increased in higher age group but both age and gender were statistically insignificant (p>0.05). Long standing and uncontrolled DM was significantly associated with higher proportion and severe form of NAFLD respectively (p<0.05). Hypertension was not significantly associated with frequency and severity of NAFLD (p>0.05) but increased BMI and waist circumference were significantly associated with increased occurance of NAFLD (p<0.05). Increased triglyceride and low HDL were significantly associated with both higher proportion and severity of NAFLD (p<0.05). AST, ALT and AST: ALT, serum bilirubin and albumin level were within normal limit in all study population. Metabolic syndrome was significantly associated with NAFLD (p<0.05). After calculation of BAAT score 65% T2DM patient with NAFLD had probable chance of fibrosis in liver. Conclusion: From this study it can be inferred that NAFLD is strongly associated with type2DM and metabolic syndrome and diabetic people should be kept under supervision and periodic clinical and laboratory evaluation to avoid progression of NAFLD to steatohepatitis and chronic liver disease.