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The significance of nonalcoholic fatty liver disease (NAFLD) among patients with diabetes is unknown. We sought to determine whether a diagnosis of NAFLD influenced mortality among a community-based cohort of patients with type II diabetes mellitus.A total of 337 residents of Olmsted County, Minnesota with diabetes mellitus diagnosed between 1980 and 2000 were identified using the Rochester Epidemiology Project and the Mayo Laboratory Information System, and followed for 10.9±5.2 years (range 0.1–25). Survival was analyzed using Cox proportional hazards modeling, with NAFLD treated as a time-dependent covariate.Among the 337 residents, 116 were diagnosed with NAFLD 0.9±4.6 years after diabetes diagnosis. Patients with NAFLD were younger, and more likely to be female and obese. Overall, 99/337 (29%) patients died. In multivariate analysis to adjust for confounders, overall mortality was significantly associated with a diagnosis of NAFLD (hazard ratio (HR) 2.2; 95% confidence interval (CI) 1.1, 4.2;P=0.03), presence of ischemic heart disease (HR 2.3; 95% CI 1.2, 4.4), and duration of diabetes (HR per 1 year, 1.1; 95% CI 1.03, 1.2). The most common causes of death in the NAFLD cohort were malignancy (33% of deaths), liver-related complications (19% of deaths), and ischemic heart disease (19% of deaths). In adjusted multivariate models, NAFLD was borderline associated with an increased risk of dying from malignancy (HR 2.3; 95% CI 0.9, 5.9;P=0.09) and not from cardiovascular disease (HR 0.9; 95% CI 0.3, 2.4;P=0.81).The diagnosis of NAFLD is associated with an increased risk of overall death among patients with diabetes mellitus.