Objective To analyze the correlation between thyroid hormone sensitivity and non-alcoholic fatty liver disease (NAFLD) in type 2 diabetes mellitus (T2DM) patients with normal thyroid function. Methods This was a cross-sectional study. A retrospective analysis was performed to assess 330 T2DM patients with normal thyroid function who were hospitalized in the Department of Endocrinology, the Fifth Affiliated Hospital of Zhengzhou University from December 2023 to May 2024. According to the presence or absence of NAFLD, the patients were divided into NAFLD group (n=112) and non-NAFLD group (n=218). All patients underwent examinations like abdominal ultrasound, blood biochemistry, visceral fat area (VFA), and abdominal subcutaneous fat area (SFA). The correlations between the thyroid feedback quantile-based Index (TFQI), thyrotroph thyroxine resistance index (TT4RI), thyroid-stimulating hormone index (TSHI), free triiodothyronine/free thyroxine (FT3/FT4) with NAFLD were explored. Results Compared with non-NAFLD group, in NAFLD group had significantly higher proportions of smokers, and higher levels of body weight, body mass index, VFA, SFA, systolic/ diastolic blood pressure, fasting plasma glucose (FPG), glycosylated hemoglobin (HbA1c), total cholesterol (TC), triglyceride (TG), low density lipoprotein cholesterol (LDL-C), FT3, TFQI, and FT3/FT4 (P<0.05), and significantly lower level of high density lipoprotein cholesterol (HDL-C) (P<0.05). Spearman correlation analysis showed that TFQI was positively correlated with TG and LDL-C (P<0.05), and negatively correlated with HDL-C (P<0.05). TT4RI was positively correlated with TC, TG, FPG, and HbA1c (P<0.05). TSHI was positively correlated with TC, TG, FPG, and HbA1c (P<0.05). FT3/FT4 was positively correlated with TC, TG, LDL-C, FPG, and HbA1c. Multivariate logistic regression analysis showed that TG, VFA, HbA1c, and FT3/FT4 were independent risk factors for the occurrence of NAFLD in T2DM patients (P<0.01). By drawing the receiver operating characteristic curve, it was found that the area under the curve of FT3/FT4 for evaluating NAFLD in T2DM patients was 0.679, with a sensitivity of 70.47% and a specificity of 65.09%. Conclusion An increase in FT3/FT4 in T2DM patients with normal thyroid function is associated with an increased risk of NAFLD.