Nonalcoholic fatty liver disease (NAFLD) is closely correlated to several metabolic syndrome features. We assessed prospectively whether NAFLD predicts future cardiovascular disease (CVD) events among type 2 diabetic individuals, independent of metabolic syndrome features and other classical risk factors. We carried out a prospective nested case-control study in 2,103 type 2 diabetic patients who were free of diagnosed CVD at baseline. During 5 years of follow-up, 248 participants (case subjects) subsequently developed nonfatal coronary heart disease (myocardial infarction and coronary revascularization procedures), ischemic stroke, or cardiovascular death. Using risk-set sampling, 496 patients (control subjects) among those who remained free of diagnosed CVD during follow-up were randomly selected in a 2:1 ratio, matched for age and sex to the case subjects. After adjustment for age, sex, smoking history, diabetes duration, HbA1c, LDL cholesterol, liver enzymes, and use of medications, the presence of NAFLD was significantly associated with an increased CVD risk (odds ratio 1.84, 95% CI 1.4-2.1, P < 0.001). Additional adjustment for the metabolic syndrome (as defined by National Cholesterol Education Program Adult Treatment Panel III criteria) appreciably attenuated, but did not abolish, this association (1.53, 1.1-1.7, P = 0.02). In conclusion, NAFLD is significantly associated with a moderately increased CVD risk among type 2 diabetic individuals. This relationship is independent of classical risk factors and is only partly explained by occurrence of metabolic syndrome.