Abstract: Objective: To explore the effect of Chaihu Shugan Powder combined with metformin on rats with type 2 diabetes mellitus(T2DM) and non-alcoholic fatty liver disease(NAFLD), and to explore its possible mechanism. Methods: Ten rats were randomly selected as normal control(control) group and fed with ordinary diet. A rat model of T2DM complicated with NAFLD(T2DM-NAFLD) was constructed by feeding high-glucose and high-fat chow and intravenous injection of streptozotocin. Forty T2DM-NAFLD rats were randomly divided into a model group, a Chaihu Shugan Powder group(CHSG group), a metformin group(MET group), and a combination group(MET+CHSG group), with 10 rats in each group. The rats in the control group and the model group were gavaged with equal volumes of saline for 14weeks. A reagent kit was used to detect the levels of interleukin(IL)-6, tumor necrosis factor-α(TNF-α),blood glucose, insulin, leptin, triglyceride(TG), total cholesterol(TC), low density lipoprotein cholesterol(LDLC), high density lipoprotein cholesterol(HDL-C), aspartate aminotransferase(AST), alanine aminotransferase(ALT), reactive oxygen species(ROS), malondialdehyde(MDA) and antioxidant enzymes(SOD) in serum and liver tissue; hematoxylin and eosin(HE) staining and oil red O staining were used to detect liver histopathological damage; real-time fluorescence quantitative PCR(RT-q PCR) was used to detect the expression of acetyl coenzyme A carboxylase(ACC), fatty acid synthase(FAS), sterol regulatory element-binding protein-1c(SREBP-1c),and peroxisome proliferator-activated receptor alpha(PPARα) gene in liver tissue; western blotting analysis was used to detect the expression of proteins related to Nrf2/HO-1 signaling pathway in liver tissue. Results: Compared with the control group, the body weight, serum HDL-C levels, and PPARa and LPL mRNA expression, liver tissue GS and SOD activities, nuclear Nrf2 and HO-1 protein expression levels of the rats in the model group were significantly reduced, while liver weight, fasting blood glucose, insulin, HOMA-IR, ALT, AST, TC and TG,IL-6, and TNF-α, levels in serum, as well as the expression of liver tissue SREBP-1c, ACC, FAS, IL-6, TNF-α and NF-κB, liver tissue PEPCK and G6Pase activities, and the levels of ROS and MDA in liver tissue were significantly increased(P＜0.05). Compared with the model group, the body weight, serum HDL-C levels, liver tissue GS and SOD activities, and nuclear Nrf2 and HO-1 protein expression levels of the CHSG group, MET group,and MET + CHSG group rats were significantly increased, and the MET + CHSG group was significantly higher than the CHSG group and MET group(P＜0.05). Compared with the model group, the liver weight, serum fasting blood glucose, insulin, HOMA-IR, ALT, AST, TC and TG, IL-6, TNF-α levels of rats, as well as the levels of liver tissue SREBP-1c, ACC and FAS, IL-6, TNF-α and NF-κB mRNA expression, the activities of PEPCK and G6Pase in liver tissue, and the levels of ROS and MDA in liver tissue of the rats in the CHSG, MET, and MET+CHSG groups were significantly reduced(P＜0.05), and the MET+CHSG group was significantly lower than the CHSG group and MET group(P＜0.05). Conclusion: Chaihu Shugan Powder combined with metformin has a liver protective effect on T2DM NAFLD rats, and its mechanism may be related to the Nrf2/HO-1 antioxidant signaling pathway.