Background: Several epidemiological studies have investigated the association between vitamin D deficiency and abnormal liver enzyme levels and type 2 diabetes (T2D) with inconsistent conclusions. Objectives: The current research aims to evaluate the effect of eight weeks of vitamin D consumption alongside exercise in water on liver enzymes and the mental health of women with type 2 diabetes. Methods: Forty women with type 2 diabetes aged 40 to 60 were divided into four groups of 10 subjects: (1) exercise in water and vitamin D supplementation, (2) exercise in water, (3) vitamin D supplementation, and (4) control group. The water exercise group performed three exercise sessions per week for eight weeks (Borg scale of 14), and vitamin D supplementation groups consumed 50,000 (IU) vitamin D every week. Liver enzymes and mental health (Beck's stress and anxiety (BAI) questionnaire (21 questions, alpha Cronbach 0.92) and depression (BDI-II) questionnaires (21 questions, alpha Cronbach 0.87)) were administered before and after eight weeks of training. The data were analyzed using descriptive and inferential statistics by SPSS software version 21. Kolmogorov-Smirnov test and one-way analysis of variance and paired t-test were used to analyze the data at a significance level of 0.05. Results: Aspartate aminotransferase and alanine aminotransferase decreased significantly after eight weeks in the vitamin D + water exercise and water exercise groups (P < 0.05). Moreover, depression and stress scores significantly decreased after the intervention in the vitamin D + water exercise and water exercise groups (P < 0.05). Conclusions: The findings demonstrated that exercise in water plus vitamin D consumption improved anthropometric indices and liver enzymes and alleviated depression and stress in patients with type 2 diabetes. These two interventions can be combined to reduce type 2 diabetes complications.