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Summary Background Non‐alcoholic fatty liver disease (NAFLD), prediabetes and type 2 diabetes mellitus are known to be closely linked with obesity as early as during childhood. Objectives The study aimed to determine the prevalence of prediabetes and T2DM in children with obesity with or without increased transaminases. Methods Data from the observational multicentre (n = 51), cross‐sectional Adipositas Patienten Verlaufsbeobachtung registry were analyzed. Mild increase (mild group) was defined by alanine transaminase (ALT) >24 to ≤50 U/L and moderate to severe increase (advanced group) by ALT > 50 U/L. Prediabetes and T2DM were defined according to recent IDF/ISPAD guidelines. Results The prevalence of prediabetes and T2DM was 11.9% (95% CI: 11.0–12.8) and 1.4% (95% CI: 1.1–1.7) among all participants (n = 4932; male = 2481; mean age 12.9 ± 2.7 years; BMI‐SDS 2.1 ± 0.5; Tanner stage 3.2 ± 1.5). The prevalence of impaired glucose metabolism (prediabetes and T2DM) was 13.8% (95% CI: 12.1–15.4) in the mild, 21.9% (95% CI: 18.8–25.1) in the advanced group, 10.7% (95% CI: 9.4–11.9) in the control group. Mild and advanced groups had greater odds ratios for prediabetes [1.42; 95% CI: 1.17–1.72, 2.26‐fold; (1.78–2.86), respectively], the advanced group also for T2DM [2.39 (1.36–4.21)] compared to controls. While an increase in transaminases predominantly affected boys, girls within the advanced group had a higher T2DM prevalence than males (5.4 vs. male 2.1%). Conclusions Children with obesity and increased liver transaminases as surrogates of NAFLD should be screened for T2DM.