OBJECTIVE In this study, we investigated the relationship between sarcopenia and fatty liver in middle-aged and elderly patients diagnosed with type 2 diabetes mellitus (T2DM) to provide a theoretical foundation for the prevention and treatment of sarcopenia. METHODS A total of 282 patients diagnosed with T2DM aged 50 and older and were admitted to the Endocrinology Department of Xin Medical University First Affiliated Hospital between December 2021 and February 2023, were selected. Body mass index (BMI), and limb and trunk muscle mass of the patients were measured, and data were collected. Patients were grouped based on the sarcopenia diagnostic criteria. All study participants underwent the same physical examinations and laboratory tests. The relationship between the onset of sarcopenia and fatty liver in middle-aged and elderly patients diagnosed with T2DM was then investigated using statistical analysis. RESULTS Comparing the sarcopenia group to the non-sarcopenia group revealed statistically significant variations in gender, BMI, fatty liver prevalence rate, uric acid (UA), alanine aminotransferase (ALT), blood glucose, blood lipid associated indicators, and limb skeletal muscle content. There were, however, no statistically significant differences in age, disease duration, hypertension, smoking, or alcohol intake. There was a positive correlation between BMI, UA, fasting c-peptide, and Appendicular Skeletal Muscle Index (ASMI). Higher levels of BMI, ASMI, and UA were identified as protective variables against sarcopenia by multifactorial logistic regression analysis. CONCLUSIONS Higher levels of BMI, ASMI, and UA can greatly reduce skeletal muscle atrophy in patients with T2DM. Patients with a fatty liver may be less vulnerable to sarcopenia. There is little evidence, however, that a fatty liver works as a preventive factor against sarcopenia.