To investigate the effect of antidiabetic agents on nonalcoholic fatty liver disease (NAFLD) in patients with type 2 diabetes mellitus (T2DM), 75 patients with T2DM and NAFLD under inadequate glycemic control by metformin were randomized (1:1:1) to receive add-on liraglutide, sitagliptin, or insulin glargine in this 26-week trial. The primary endpoint was the change in intrahepatic lipid (IHL) from baseline to week 26 as quantified by magnetic resonance imaging-estimated proton density fat fraction (MRI-PDFF). Secondary endpoints included changes in abdominal adiposity (subcutaneous adipose tissue [SAT] and visceral adipose tissue [VAT]), glycated hemoglobin, and body weight from baseline to week 26. We analysed data from intent-to-treat population. MRI-PDFF, VAT, and weight decreased significantly with liraglutide (15.4% +/- 5.6% to 12.5% +/- 6.4%, P < 0.001; 171.4 +/- 27.8 to 150.5 +/- 30.8, P = 0.003; 86.6 +/- 12.9 kg to 82.9 +/- 11.1 kg, P = 0.005, respectively) and sitagliptin (15.5% +/- 5.6% to 11.7% +/- 5.0%, P = 0.001; 153.4 +/- 31.5 to 139.8 +/- 27.3, P = 0.027; 88.2 +/- 13.6 kg to 86.5 +/- 13.2 kg, P = 0.005, respectively). No significant change in MRI-PDFF, VAT, or body weight was observed with insulin glargine. SAT decreased significantly in the liraglutide group (239.9 +/- 69.0 to 211.3 +/- 76.1; P = 0.020) but not in the sitagliptin and insulin glargine groups. Changes from baseline in MRI-PDFF, VAT, and body weight were significantly greater with liraglutide than insulin glargine but did not differ significantly between liraglutide and sitagliptin. Conclusion: Combined with metformin, both liraglutide and sitagliptin, but not insulin glargine, reduced body weight, IHL, and VAT in addition to improving glycemic control in patients with T2DM and NAFLD.