Non-alcoholic fatty liver disease (NAFLD), including the disease stages steatosis and non-alcoholic steatohepatitis, is the most common cause of chronic liver disease worldwide and linked to the epidemic of diabetes mellitus and obesity. It is characterized by a high cardiovascular and liver-related mortality and expected to be the leading cause for liver transplantation in the near future. This review summarizes recent progress made in our understanding of the disease pathogenesis and the clinical management of patients with NAFLD. Strategies to manage diabetes mellitus will be evaluated in terms of their effectiveness in treating patients with NAFLD and novel pharmacological targets capable to treat diabetes mellitus and NAFLD will be highlighted.