Based on ancient and modern literatures, and years of clinical experiences, we proposed that the pathogenesis characteristic of diabetic nonalcoholic fatty liver disease is “liver depression and spleen deficiency, damp-heat resistance, phlegm and blood stasis”. The spleen deficiency is its pathological basis, liver depression is the important part, stasis of damp heat, phlegm and blood are the pathogenic factors and exist in the whole process. Treatment for the disease shall give priority to tonifying spleen and soothing live, clearing heat and resolving dampness, transforming phlegm and activating blood. After treating both root and tip to tonify the viseara, strengthen the body, relieve the condition to bring cure.