Background: The association between hypothyroidism and non-alcoholic fatty liver disease (NAFLD) is increasingly studied with controversial results, and evidences regarding the effect of levothyroxine replacement therapy on NAFLD are lacking. Objectives: to examine the association between overt hypothyroidism and NAFLD, and to test the effect of levothyroxine (LT4) replacement therapy on NAFLD among subjects with overt hypothyroidism. Methods: 325 recently diagnosed overt hypothyroidism subjects were compared to 325 age, sex, and BMI matched subjects regarding metabolic characteristics, serum liver enzymes, and ultrasound diagnosed NAFLD. The same comparison was performed on subjects with NAFLD in the case group before and after 12 months of LT4 replacement therapy. Results: The mean age of participants was 45.22±5.04 years old, and 369 (56.8) were females. Subjects with overt hypothyroidism had a significantly higher prevalence of NAFLD [146 (44.9) versus 83 (25.5), p < 0.001], and higher means of metabolic variables, liver enzymes, and ultrasound liver measurements (p < 0.5). At 12 months of LT4 therapy, there was 35.6% reduction in the prevalence of NAFLD (p < 0.001), and significantly reduced values of metabolic variables, and serum liver enzymes (p < 0.05) among subjects with NAFLD in the case group. Conclusions: Overt hypothyroidism was significantly associated with NAFLD. Moreover, 12 months LT4 replacement therapy significantly reduced the prevalence of NAFLD.