Non-alcoholic fatty-liver disease (NAFLD), caused by elevated hepatic lipids, inflammation and oxidative stress, is the most common liver disease globally. Low molecular weight fucoidan (LMWF), a sulfated polysaccharide extracted from brown seaweeds, has shown strong anti-inflammatory and antioxidant activities, which has not been explored in diabetes-induced NAFLD. Therefore, the present study sought to determine whether LMWF protects obese diabetic db/db mice against NAFLD. Results showed LMWF administration decreased plasma level of alanine aminotransferase, aspartate aminotransferase, total cholesterol, and triglyceride, as well as alleviated hepatic accumulation of triglyceride and total cholesterol in db/db mice. LMWF also ameliorated hepatic oxidative stress by suppressing superoxide production and lipid peroxidation, and increasing catalase and superoxide dismutase activity in the liver of db/db mice. Furthermore, LMWF down-regulated several pro-inflammatory cytokines and transcription factor, and up-regulated the anti-inflammatory adiponectin. These changes were accompanied by the activation of hepatic SIRT1/AMPK/PGC1α signaling with LMWF treatment. In addition, blocking SIRT1 or AMPK by inhibitor notably abolished LMWF-elicited protection against palmitic acid-induced oxidative stress and inflammation in hepatocytes. These results suggest LMWF prevents NAFLD in db/db mice by activation of SIRT1/AMPK/PGC1α signaling pathway, which prevents lipotoxicity-related oxidative stress and inflammation. Therefore, LMWF provides a potential supplementary treatment for obesity/diabetes-induced NAFLD.