Background: The incidence of nonalcoholic fatty liver disease (NAFLD) has increased recently and is related to obesity and the associated surge in type 2 diabetes mellitus (DM) and metabolic syndrome diagnoses. We aim to compare the effectiveness of tofogliflozin and pioglitazone treatment on hepatic steatosis in patients with NAFLD with type 2 DM. Methods: This is an open label, prospective, randomized exploratory study. Patients who meet the inclusion criteria and do not meet any exclusion criteria will undergo magnetic resonance imaging (MRI)-based proton density fat fraction (MRI-PDFF). Patients with ≥10% liver fat content on MRI-PDFF will be randomly assigned to receive tofogliflozin 20 mg per day (n = 20) or pioglitazone 15-30 mg per day (n = 20). MRI will be performed after 24 weeks following initiation of medication therapy. Then, patients will take tofogliflozin and pioglitazone in combination in both groups for 24 weeks. MRI will be performed again at 48 weeks (24 weeks after initiation medication in combination). Results: Our study's primary endpoint will be change in hepatic steatosis measured by MRI-PDFF at 24 weeks after medication therapy. The secondary endpoint will be change in alanine aminotransferase at 24 weeks of medication therapy and the main exploratory endpoint will be changes in liver fat content and liver sclerosis at 48 weeks of medication. Conclusions: We will compare the effectiveness of tofogliflozin and pioglitazone treatment using MRI for improving hepatic steatosis in patients with NAFLD complicated by DM and investigate if the combination of these two medications is effective for treating NAFLD. Trial registration: This trial is registered in the Japan Registry of Clinical Trials (jRCTs031180159). Protocol version: 1.2, 14 December 2018.