Non-alcoholic fatty liver disease (NAFLD) is linked to type 2 diabetes mellitus (T2DM), obesity, and insulin resistance. The Rho/ROCK pathway had been involved in the pathophysiology of diabetic complications. This study was designed to assess the possible protective impacts of the Rho/Rho-associated coiled-coil containing protein kinase (Rho/ROCK) inhibitor fasudil against NAFLD in T2DM rats trying to elucidate the underlying mechanisms. Animals were assigned into control rats, non-treated diabetic rats with NAFLD, and diabetic rats with NAFLD that received fasudil treatment (10 mg/kg per day) for 6 weeks. The anthropometric measures and biochemical analyses were performed to assess metabolic and liver function changes. The inflammatory and oxidative stress markers and the histopathology of rat liver tissues were also investigated. Groups with T2DM showed increased body weight, serum glucose, and insulin resistance. They exhibited disturbed lipid profile, enhancement of inflammatory cytokines, and deterioration of liver function. Fasudil administration reduced body weight, insulin resistance, and raised liver enzymes. It improved the disturbed lipid profile and attenuated liver inflammation. Moreover, it slowed down the progression of high fat diet (HFD)-induced liver injury and reduced the caspase-3 expression. The present study demonstrated beneficial amelioration effect of fasudil on NAFLD in T2DM. The mechanisms underlying these impacts are improving dyslipidemia, attenuating oxidative stress, downregulated inflammation, improving mitochondrial architecture, and inhibiting apoptosis.