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Nonalcoholic fatty liver disease (NAFLD) is a strong risk factor for development of type 2 diabetes, but little is known about how long-term NAFLD or its histologic features affect risk. We aimed to investigate the cumulative incidence of type 2 diabetes in patients with NAFLD and to identify histologic factors that affect risk of diabetes.We performed a retrospective study of 396 patients in Sweden diagnosed with NAFLD by biopsy analysis from 1971 through 2009 who did not have type 2 diabetes at baseline. Data on development of type 2 diabetes were collected from patient charts and national registers. Patients were categorized into groups with fibrosis stages 0–2 (n = 357) or stages 3–4 (n = 39). Hazard ratios of histologic parameters for type 2 diabetes development were calculated separately in a multivariate Cox regression model adjusted for sex, age, body mass index, and serum levels of triglycerides greater than 150 mg/dL.During a mean follow-up period of 18.4 years (range, 0–41 years), 132 individuals (33%) developed type 2 diabetes. A significantly higher proportion of patients with fibrosis stages 3–4 (51.2%) developed type 2 diabetes than patients with fibrosis stages 0–2 (31.3%) (P= .02). For patients with fibrosis stages 0–2, fat score associated independently with development of type 2 diabetes (adjusted hazard ratio, 1.34; 95% confidence interval, 1.03–1.74;P= .03). No histologic factors associated with development of diabetes in patients with fibrosis stages 3–4. Presence of nonalcoholic steatohepatitis was not associated with development of type 2 diabetes.In a retrospective study we found a higher proportion of patients with fibrosis stages 3–4 to develop type 2 diabetes than patients with fibrosis stages 0–2. In patients with fibrosis stages 0–2, fat score associates with risk of type 2 diabetes.