Abstract Background The prevalence of non-alcoholic fatty liver disease (NAFLD) has been increasing rapidly. It is nowadays recognized as the most frequent liver disease, affecting a quarter of global population and regularly coexisting with metabolic disorders such as type 2 diabetes, hypertension, obesity, and cardiovascular disease. In a more simplistic view, NAFLD could be defined as an increase in liver fat content, in the absence of secondary cause of steatosis. In fact, the clinical onset of the disease is a much more complex process, closely related to insulin resistance, limited expandability and dysfunctionality of adipose tissue. A fatty liver is a main driver for a new recognized liver-pancreatic α-cell axis and increased glucagon, contributing to diabetes pathophysiology. Main text This review will focus on the clinical and pathophysiological connections between NAFLD, insulin resistance and type 2 diabetes. We reviewed non-invasive methods and several scoring systems for estimative of steatosis and fibrosis, proposing a multistep process for NAFLD evaluation. We will also discuss treatment options with a more comprehensive view, focusing on the current available therapies for obesity and/or type 2 diabetes that impact each stage of NAFLD. Conclusion The proper understanding of NAFLD spectrum—as a continuum from obesity to metabolic syndrome and diabetes—may contribute to the early identification and for establishment of targeted treatment.