Aims/hypothesis Liraglutide, a daily injectable glucagon-like peptide-1 receptor (GLP-1r) agonist, has been shown to reduce liver fat content (LFC) in humans. Data regarding the effect of dulaglutide, a once-weekly GLP-1r agonist, on human LFC are scarce. This study examined the effect of dulaglutide on LFC in individuals with type 2 diabetes and non-alcoholic fatty liver disease (NAFLD). Methods Effect of dulaglutide on liver fat (D-LIFT) was a 24 week, open-label, parallel-group, randomised controlled trial to determine the effect of dulaglutide on liver fat at a tertiary care centre in India. Adults (n = 64), who had type 2 diabetes and MRI-derived proton density fat fraction-assessed LFC of ≥6.0% at baseline, were randomly assigned to receive dulaglutide weekly for 24 weeks (add-on to usual care) or usual care, based on a predefined computer-generated number with a 1:1 allocation that was concealed using serially numbered, opaque, sealed envelopes. The primary endpoint was the difference of the change in LFC from 0 (baseline) to 24 weeks between groups. The secondary outcome measures included the difference of the change in pancreatic fat content (PFC), change in liver stiffness measurement (LSM in kPa) measured by vibration-controlled transient elastography, and change in liver enzymes. Results Eighty-eight patients were screened; 32 were randomly assigned to the dulaglutide group and 32 to the control group. Overall, 52 participants were included for per-protocol analysis: those who had MRI-PDFF data at baseline and week 24. Dulaglutide treatment resulted in a control-corrected absolute change in LFC of −3.5% (95% CI −6.6, −0.4; p = 0.025) and relative change of −26.4% (−44.2, −8.6; p = 0.004), corresponding to a 2.6-fold greater reduction. Dulaglutide-treated participants also showed a significant reduction in γglutamyl transpeptidase (GGT) levels (mean between-group difference −13.1 U/l [95% CI −24.4, −1.8]; p = 0.025) and non-significant reductions in aspartate aminotransferase (AST) (−9.3 U/l [−19.5, 1.0]; p = 0.075) and alanine aminotransferase (ALT) levels (−13.1 U/l [−24.4, 2.5]; p = 0.10). Absolute changes in PFC (−1.4% [−3.2, 0.3]; p = 0.106) and LSM (−1.31 kPa [−2.99, 0.37]; p = 0.123) were not significant when comparing the two groups. There were no serious drug-related adverse events. Conclusions/interpretation When included in the standard treatment for type 2 diabetes, dulaglutide significantly reduces LFC and improves GGT levels in participants with NAFLD. There were non-significant reductions in PFC, liver stiffness, serum AST and serum ALT levels. Dulaglutide could be considered for the early treatment of NAFLD in patients with type 2 diabetes. Trial registration ClinicalTrials.gov NCT03590626 Funding The current study was supported by an investigator-initiated study grant from Medanta-The Medicity's departmental research fund and a grant from the Endocrine and Diabetes Foundation (EDF), India.