Abstract Background Non-Alcoholic Fatty Liver Disease, recently better recognised as Metabolic Dysfunction–Associated Steatotic Liver Disease, is the most prevalent form of chronic liver disease at present time. It is estimated to impact 32% of the world's population, hence representing a significant health burden. Aim of the work To assess the significance of plasma Lipocalin-2 (LCN2) levels in the diagnosis and prognosis of NAFLD patients. Patients and methods In this retrospective case–control study we recruited 102 subjects aged between 18 and 70 years. The included participants were split into two study groups. Group I: 51 NAFLD patients (61% men, 39% females) and Group II: 51 healthy controls (51% men and 49% females), for whom plasma LCN2 levels were assessed and correlated with NAFLD fibrosis score, FIB4 and fatty liver index. Results In this study, LCN2 levels in NAFLD patients were significantly greater compared to individuals in the control group (p < 0.001), with a mean of 1893.214 ± 1002.852 ng/dL in the cases and a mean of 466.020 ± 397.699 ng/dL in the controls. This suggests the use of LCN2 as a possible diagnostic marker of NAFLD. The mean LCN2 levels in this study also significantly increased as the grade of fatty liver increased from I to III (p < 0.001). This in turn proposes the use of LCN2 as a prognostic marker for NAFLD progression. LCN2 also significantly correlated with the fatty liver index and NAFLD Fibrosis scoring systems, but not with Fib-4. With an area under the ROC of 0.906, it demonstrated excellent diagnostic performance with 84% sensitivity, 90% specificity, 89.6% PPV and 85.2% NPV for the prediction of NAFLD patients. Conclusion Lipocalin-2 performs as a diagnostic and a possible prognostic marker for metabolic dysfunction-associated steatotic liver disease.