OBJECTIVE: To determine the frequency of hepatic steatosis by ultrasonography in diabetics and compare with non-diabetics. MATERIAL AND METHODS: This case-control study was carried out in a private clinic at Hyderabad, Sindh - Pakistan, on 100 patients out of which 50 were known diabetics and 50 were controls. Liver ultrasound findings were studied in both study groups. RESULTS: Bright liver was shown in 20 (40%) diabetics out of which 12 were females and 8 were males. Control group showed bright liver in 15 (30%) out of which 6 were males and 9 were females. Focal/patchy infiltration was seen in 4 (16%) of diabetic men and 5 (20%) of diabetic women, whereas control group showed patchy infiltration in 10 (20%) patients, equals in males and females. In addition peri-portal fibrosis was found in 4 males and 6 females in the diabetic group. Liver biopsy/CT-scan confirmed the sonographic findings. CONCLUSION: Ultrasonography is a cost effective and non-invasive procedure to diagnose steato-hepatitis. It is readily available and the results are comparable to other invasive and or expensive diagnostic tools.