Type 2 Diabetes mellitus (DM) is associated with various types of liver disorders including elevated liver enzymes. This study was carried out to observe hepatocellular injury in type 2 Diabetes mellitus as evidenced by raised Alanine aminotransferase (ALT) among the type 2 Diabetes mellitus patients and to find out association between elevated ALT and glycaemic control. This was a descriptive cross-sectional comparative study carried out in Department of Medicine, Rajshahi Medical College Hospital and Rajshahi Diabetic Association Hospital, Rajshahi, Bangladesh from July 2009 to June 2010. One hundred (100) diagnosed type 2 diabetic patients according to WHO criteria and 30 apparently healthy people of both sexes were included. Age of the study people were >40 years. All of those study population were free from taking any hepatotoxic drugs, inj. Insulin, alcohol and preexisting liver disease. Detailed History, thorough clinical examination and relevant investigations were done for exclusion. The frequency of abnormal ALT, Serum bilirubin, Aspartate aminotransferase (AST), Alkaline phosphatase, Prothrombin time and Serum albumin were 30%, 6%, 7%, 6%, 54% and 12% respectively in type 2 diabetic patients and 3.3%, 00%, 00%, 6.7%, 10% and 3.3% respectively in normal people. Serum ALT (U/L) level (mean±SD) of the type 2 diabetic patients and normal people were (39.00±24.21) and (28.26±6.67) respectively. This difference is highly significant (p<0.001). Elevated serum ALT level of type 2 diabetic patients showed positive association with increased Body mass index (BMI) (p<0.05) and poor glycaemic control (p<0.05) and fatty liver (p=0.055). So, a high proportion of patients with type 2 diabetes mellitus have raised serum Alanine aminotransferase level. Elevated serum ALT level was also associated with high BMI, poor glycaemic control and fatty liver which may be a marker of NAFLD and insulin resistance.