Nonalcoholic fatty liver disease (NAFLD) is the most common cause of elevated liver function tests results, after the commonly investigated causes have been excluded, and frequently coexists with type 2 diabetes mellitus (T2DM) because the conditions have common risk factors. As both T2DM and NAFLD are related to adverse outcomes of the other, diagnosis and valuation of fatty liver is an important part of the management of diabetes. Although noninvasive methods, such as biomarkers, panel markers, and imaging, may support a diagnostic evaluation of NAFLD patients, accurate histopathological findings cannot be achieved without a liver biopsy. As it is important to know whether steatohepatitis and liver fibrosis are present for the management of NAFLD, liver biopsy remains the gold standard for NAFLD diagnosis and evaluation. Therefore, new investigations of the pathogenesis of NAFLD are necessary to develop useful biomarkers that could provide a reliable noninvasive alternative to liver biopsy.