In adults with mild type 2 diabetes, reductions in liver fat are inversely associated with improvements in the glucagon-to-C-peptide ratio, indicating that altered pancreatic hormone balance is linked to improved hepatic metabolism.

When sugar intake drops, the liver stops making new fat and starts burning fat for energy instead. This lowers fat buildup in the liver and reduces the flow of fatty acids to the pancreas. With less fat in the pancreas, insulin-producing cells work better and release more insulin when needed. At the same time, the liver produces more ketones because it lacks the fuel to run its usual energy cycle, which signals the body to release more glucagon. The result is a healthier balance between glucagon and insulin, which helps the liver use energy more efficiently.