Background: ‘Nonalcoholic fatty liver disease (NAFLD) is a prevalent liver disorder closely linked to metabolic conditions, notably type 2 diabetes mellitus (T2DM)’. ‘Alanine aminotransferase (ALT) is a key liver function biomarker’ with elevated levels often indicating hepatic injury. Understanding the relationship between ALT levels, NAFLD severity, and glycemic control is essential for effective disease management. Objective: This study aimed to investigate the association between ALT levels, the severity of NAFLD, and glycemic parameters in individuals with and without T2DM. Methods: ‘A cross-sectional study was conducted at Pak International Medical College, Peshawar, Pakistan, from January 2023 to January 2024’, involving 85 participants diagnosed with NAFLD. Data collection included demographic information, clinical assessments, laboratory evaluations of liver enzymes, glycemic parameters, lipid profiles, and inflammatory markers. NAFLD severity was determined using imaging techniques and fibrosis scores. ‘Statistical analyses were performed to explore correlations between’ ALT levels, NAFLD severity, and glycemic control. Results: The study population had a mean age of 48.6 years, with 55.3% males and 49.4% classified as obese. Elevated ALT levels were significantly associated with increased NAFLD severity (p = 0.015) and poorer glycemic control, as indicated by higher ‘fasting blood glucose and HbA1c levels (p < 0.05)’. Additionally, dyslipidemia and elevated inflammatory markers were prevalent among participants, correlating with both ALT levels and NAFLD severity. Conclusion: Elevated ALT levels are closely linked to the severity of NAFLD and impaired glycemic control in individuals with and without T2DM. Monitoring ALT levels can aid in identifying patients at risk for progressive liver disease and poor glycemic outcomes, emphasizing the need for integrated management strategies targeting both hepatic and metabolic health.