© 2018 John Wiley & Sons A/S. Published by John Wiley & Sons Ltd Background & Aims: Insulin resistance is a risk marker for non-alcoholic fatty liver disease, and a risk factor for liver disease progression. We assessed temporal trajectories of insulin resistance and β-cell response to serum glucose concentration throughout adulthood and their association with diabetes risk in non-alcoholic fatty liver disease. Methods: Three thousand and sixty participants from Coronary Artery Risk Development in Young Adults, a prospective bi-racial cohort of adults age 18-30 years at baseline (1985-1986; Y0) who completed up to 5 exams over 25 years and had fasting insulin and glucose measurement were included. At Y25 (2010-2011), non-alcoholic fatty liver disease was assessed by noncontrast computed tomography after exclusion of other liver fat causes. Latent mixture modelling identified 25-year trajectories in homeostatic model assessment insulin resistance and β-cell response homeostatic model assessment-β. Results: Three distinct trajectories were identified, separately, for homeostatic model assessment insulin resistance (low-stable [47%]; moderate-increasing [42%]; and high-increasing [12%]) and homeostatic model assessment-β (low-decreasing [16%]; moderate-decreasing [63%]; and high-decreasing [21%]). Y25 non-alcoholic fatty liver disease prevalence was 24.5%. Among non-alcoholic fatty liver disease, high-increasing homeostatic model assessment insulin resistance (referent: low-stable) was associated with greater prevalent (OR 95% CI = 8.0, 2.0-31.9) and incident (OR = 10.5, 2.6-32.8) diabetes after multivariable adjustment including Y0 or Y25 homeostatic model assessment insulin resistance. In contrast, non-alcoholic fatty liver disease participants with low-decreasing homeostatic model assessment-β (referent: high-decreasing) had the highest odds of prevalent (OR = 14.1, 3.9-50.9) and incident (OR = 10.3, 2.7-39.3) diabetes. Conclusion: Trajectories of insulin resistance and β-cell response during young and middle adulthood are robustly associated with diabetes risk in non-alcoholic fatty liver disease. Thus, how persons with non-alcoholic fatty liver disease develop resistance to insulin provides important information about risk of diabetes in midlife above and beyond degree of insulin resistance at the time of non-alcoholic fatty liver disease assessment.