Nonalcoholic fatty liver disease (NAFLD) consists of the entire spectrum of fatty liver disease in patients without significant alcohol consumption, ranging from nonalcoholic fatty liver (NAFL) to nonalcoholic steatohepatitis (NASH) to cirrhosis, with NASH recently shown as an important cause of hepatocellular carcinoma (HCC). There is a close relationship between insulin resistance (IR) and NAFLD, with a five-fold higher prevalence of NAFLD in patients with type 2 diabetes (T2DM) compared to that in patients without T2DM. IR is involved in the progression of disease conditions such as steatosis and NASH, as well as hepatic fibrosis progression. The mechanisms underlying these processes involve genetic factors, hepatic fat accumulation, alterations in energy metabolism, and inflammatory signals derived from various cell types including immune cells. In NASH-associated fibrosis, the principal cell type responsible for extracellular matrix production is the hepatic stellate cell (HSC). HSC activation by IR involves "direct" and "indirect" pathways. This review will describe the molecular mechanisms of inflammation and hepatic fibrosis in IR, the relationship between T2DM and hepatic fibrosis, and the relationship between T2DM and HCC in patients with NAFLD.