Nonalcoholic fatty liver disease (NAFLD) is a growing health concern with increasing prevalence and associated health impacts. Although no approved drugs are available for the NAFLD treatment, several hypoglycemic agents have been investigated as promising therapeutic agents. We aimed to compare the risk of occurrence of NAFLD with respect to the use of different hypoglycemic agents in patients with type 2 diabetes. This retrospective cohort study used data from the National Health Insurance Service-National Sample Cohort of South Korea. Participants newly diagnosed with type 2 diabetes (2003-2019) were included in this study. Two new user-active comparator cohorts were assembled: Cohort 1, new users of thiazolidinediones (TZD) and dipeptidyl peptidase-4 inhibitors (DPP-4i), and Cohort 2, new users of sodium-glucose cotransporter-2 inhibitors (SGLT-2i) and DPP-4i. The occurrence of NAFLD was defined based claims that include diagnostic codes. Hazard ratios (HRs) and 95% confidence intervals (CIs) were estimated using Cox proportional hazard models in 1:3 propensity score (PS)-matched cohorts. For 65,224 patients newly diagnosed with type 2 diabetes, the overall prevalence of NAFLD was 42.6%. The PS-matched Cohort 1 included 6,351 and 2,117 new users of DPP-4i and TZD, respectively. Compared to DPP-4i, TZD use was associated with the decreased risk of NAFLD (HR, 0.66; 95% CI: 0.55-0.78). Cohort 2 consisted of 6,783 and 2,261 new users of DPP-4i and SGLT-2i, respectively; SGLT-2i use was associated with a decreased risk of NAFLD (HR, 0.93; 95% CI: 0.80-1.08). This population-based cohort study supports the clinical implications of prioritizing TZD and SGLT-2i over DPP-4i in reducing the risk of occurrence of NAFLD in patients with type 2 diabetes. However, the findings lacked statistical significance, highlighting the need for further verification studies.