Non-alcoholic fatty liver disease (NAFLD) associates with abnormal mitochondrial capacity. While oxidative capacity can be increased in steatosis, hepatic adenosine triphosphate (ATP) descreases in long-standing diabetes. However, longitudinal studies of diabetes-related NAFLD and its relationship to hepatic energy metabolism are lacking.This prospective study comprised volunteers with type 1 (T1DM, n=30) and type 2 (T2DM, n=37) diabetes. At diagnosis and 5 years later, they underwent 1H/31P magnetic resonance spectroscopy for measurements of hepatic lipid (HCL), γATP, inorganic phosphate (Pi) concentrations and imaging for adipose tissue volumes. Insulin sensitivity was assessed by hyperinsulinemic-euglycemic clamps.At diagnosis, T2DM individuals had higher HCL and adipose tissue volumes, but lower whole-body insulin sensitivity than T1DM, despite comparable glycemic control. NAFLD was present in 38% of T2DM and 7% of T1DM. After 5 years, only persons with T2DM had increased their visceral adipose tissue and almost doubled HCL (p<0.001) resulting in 70% prevalence of NAFLD independent of diabetes treatment. Changes in HCL correlated with adipose tissue volume and insulin resistance (r=0.50 and r=0.44, both p<0.05). Pi decreased by 17% and 10% in T2DM and T1DM (p<0.05), respectively. In T1DM, HCL did not change, whereas γATP decreased by 10% and correlated negatively with HbA1c (r=-0.56, p<0.05).The rapid increase in HCL during the early course of T2DM likely results from enlarging adipose tissue volume and insulin resistance in face of impaired hepatic mitochondrial adaptation. The decrease of phosphorus metabolites in T1DM may be rather due to the pharmacological insulin supply.