Non alcoholic fatty liver disease is an emerging risk factor for Cirrhosis and liver malignancy. The incidence of NAFLD is more in obese and diabetic patients. The current study is undertaken to determine the prevalence of NAFLD in diabetic patients. The relationship of NAFLD with variables like sex, age and number of years since diagnosis of diabetes was also noted. Total 100 known diabetic patients admitted at Geetanjali Hospital, Udaipur, were studied for USG diagnosed fatty liver. It was observed that 39 % diabetic patients had NAFLD. The incidence increased with rising age, and also with duration of diabetes. Thus all diabetic patients should be screened for fatty liver so that its progress to NASH and cirrhosis can be prevented.