Follow-up studies have shown that non-alcoholic fatty liver disease (NAFLD) is associated with an increased risk of incident diabetes, but currently, it is uncertain whether this risk changes with increasing severity of NAFLD. We performed a meta-analysis of relevant studies to quantify the magnitude of the association between NAFLD and risk of incident diabetes.We systematically searched PubMed, Scopus and Web of Science databases from January 2000 to June 2020 using predefined keywords to identify observational studies with a follow-up duration of at least 1 year, in which NAFLD was diagnosed by imaging techniques or biopsy. Meta-analysis was performed using random-effects modelling.33 studies with 501 022 individuals (30.8% with NAFLD) and 27 953 cases of incident diabetes over a median of 5 years (IQR: 4.0-19 years) were included. Patients with NAFLD had a higher risk of incident diabetes than those without NAFLD (n=26 studies; random-effects HR 2.19, 95% CI 1.93 to 2.48; I 2 =91.2%). Patients with more 'severe' NAFLD were also more likely to develop incident diabetes (n=9 studies; random-effects HR 2.69, 95% CI 2.08 to 3.49; I 2 =69%). This risk markedly increased across the severity of liver fibrosis (n=5 studies; random-effects HR 3.42, 95% CI 2.29 to 5.11; I2=44.6%). All risks were independent of age, sex, adiposity measures and other common metabolic risk factors. Sensitivity analyses did not alter these findings. Funnel plots did not reveal any significant publication bias.This updated meta-analysis shows that NAFLD is associated with a ~2.2-fold increased risk of incident diabetes. This risk parallels the underlying severity of NAFLD.