Insulin resistance is a major feature of type 2 diabetes mellitus, obesity and nonalcoholic fatty liver disease (NAFLD). Several studies pointed out the possible role of increased leptin in NAFLD in humans. The aim of this study is to determine the effect of metformin on plasma leptin levels in obese patients with type 2 diabetes mellitus and NAFLD compared with lifestyle interventions. Thirty-four obese patients with newly diagnosed type 2 diabetes mellitus were prospectively followed for 6 months. All patients had ultrasonographic evidence of NAFLD at baseline. The patients were randomized into two groups: group 1 (n = 15) followed lifestyle changes only and group 2 (n = 19) received metformin (1,700 mg/day). At the end of treatment, BMI, WHR, HbA1c, fasting glucose, leptin, HOMA-IR, alanine aminotransferase values decreased in both groups. No significant difference in the end-points was observed between two groups. Only in group 2, LDL decreased and HDL increased significantly. Liver echogenity decreased significantly at the end of study in both groups. The percentage of patients who no longer had evidence of NAFLD was not significantly different between the groups (20% of patients on lifestyle intervention vs. 16% of patients on metformin). The data demonstrate that, metformin and lifestyle interventions equally affected the plasma leptin levels, BMI and degree of NAFLD in obese patients with type 2 diabetes mellitus. In addition, the effects of metformin on the variables were not found to be mediated by leptin.