Epidemiological data show a strong connection between type 2 diabetes mellitus (T2DM) and metabolic-associated fatty liver disease (MAFLD). In recent years, the prevalence of both conditions has been rising simultaneously. When T2DM and MAFLD occur together, patients face a significantly higher risk of glucose and lipid metabolic disorders, with fatty liver more likely to progress to fibrosis or even malignancy. The underlying mechanisms are complex, involving multiple factors such as inflammatory responses, insulin resistance (IR), and cellular aging. Ferroptosis, a newly identified form of programmed cell death characterized by iron accumulation and lipid peroxidation, plays a crucial role in the development of T2DM and MAFLD, drawing significant attention. Current research suggests that ferroptosis contributes to the progression of these two diseases. However, the exact mechanisms of ferroptosis in T2DM-related MAFLD remain unclear. This review summarizes recent advances in ferroptosis research related to T2DM and MAFLD and highlights several potential therapeutic drugs and compounds targeting ferroptosis, aiming to provide a theoretical basis for their clinical application. Additionally, intracellular iron overload, elevated reactive oxygen species levels, and lipid peroxidation are closely associated with ferroptosis. Studies have shown that certain antidiabetic medications (e.g., metformin, pioglitazone, and liraglutide) may slow the progression of MAFLD by inhibiting ferroptosis. Furthermore, experimental studies targeting FerroTerminator1 (FOT1) have demonstrated promising therapeutic value for MAFLD and insulin resistance, suggesting that targeting ferroptosis could be an effective strategy for treating T2DM-related MAFLD.