Statins are associated with new-onset type 2 diabetes (T2D), mainly in patients with metabolic syndrome (MetS). The fatty liver index (FLI) is used as a prognostic score for the diagnosis of non-alcoholic fatty liver disease (NAFLD), which is common in patients with MetS. We aimed to investigate the association of FLI with new-onset T2D in patients initiating statin therapy. A retrospective observational study including 1241 individuals with dyslipidemia and followed up for ≥3 years. Patients with T2D and those receiving lipid-lowering treatment at the baseline visit were excluded. Models with clinical and laboratory parameters were used to assess the association of FLI with incident T2D. Among the 882 eligible subjects, 11% developed T2D during the follow-up (6 years; IQR: 4-10 years). After adjusting for sex, age and MetS parameters, a multivariate analysis revealed that age (HR:1.05; 95%CI: 1.01-1.09, < 0.05), fasting plasma glucose (HR: 1.09; 95%CI: 1.06-1.13, < 0.001) and FLI (HR: 1.02; 95%CI: 1.01-1.04, < 0.01) were independently associated with T2D risk. The subjects with probable NAFLD (FLI ≥ 60) had a three-fold increased T2D risk compared with the subjects with FLI < 60 (HR: 3.14; 95%CI: 1.50-6.59, = 0.001). A ROC curve analysis showed that FLI had a significant, although poor, predictive value for assessing T2D risk (C-Statistic: 0.67; 95%CI: 0.58-0.77, = 0.001). Higher FLI values were associated with reduced T2D-free survival (log-rank = 15.46, < 0.001). FLI is significantly and independently associated with new-onset T2D risk in patients initiating statin therapy.