CONTEXT: Cardiovascular autonomic neuropathy (CAN) diagnosed by diminished heart rate variability (HRV) is prevalent and carries an increased risk of mortality in patients with diabetes and chronic liver diseases. OBJECTIVE: To determine whether lower HRV is associated with increased liver fat content in recent-onset diabetes. DESIGN: Cross-sectional study. SETTING: German Diabetes Study (GDS), Dusseldorf, Germany. PARTICIPANTS: Individuals with type 1 diabetes (n = 97) or type 2 diabetes (n = 109) with known diabetes duration </=1 year and two age- and sex-matched glucose-tolerant control groups from the GDS baseline cohort. MAIN OUTCOME MEASURES: Four time and frequency domain HRV indices each were measured over 3 hours during a hyperinsulinemic-euglycemic clamp, whereas spontaneous cross-correlation baroreflex sensitivity (xBRS) was computed over 5 minutes. Hepatic fat content was determined by 1H magnetic resonance spectroscopy, and values >5.56% were defined as hepatic steatosis. RESULTS: Hepatic steatosis was observed in 52% and 5% of patients with type 2 and type 1 diabetes, respectively. After adjustment for sex, age, body mass index, smoking, diabetes duration, hemoglobin A1c, M-value, and triglycerides, all four vagus-mediated time domain HRV indices, three of four frequency domain indices, and xBRS were inversely associated with liver fat content in participants with type 2 diabetes (all P < 0.05) but not in the group with type 1 diabetes. CONCLUSIONS: Both lower cardiovagal tone and baroreflex sensitivity are strongly associated with prevalent hepatic steatosis in patients with recent-onset type 2 as opposed to type 1 diabetes, suggesting a role for hepatic steatosis in the early development of parasympathetic CAN in type 2 diabetes.