Nonalcoholic fatty liver disease (NAFLD) is a serious public health problem worldwide. The purpose of this study was to investigate whether Yunnan medicine Jiangzhi ointment (YMJO) can relieve the progression of NAFLD and to elucidate the specific mechanism involved. A NAFLD model was established in high-fat diet (HFD)-induced SD rats and free fatty acid (FFA)-induced BRL 3A cells. The expression of autophagy-related proteins and ferroptosis-related proteins was detected using Western blotting. The histopathological features of the livers of NAFLD rats were evaluated using hematoxylin and eosin (HE) and Oil Red O staining. The results revealed that in a successfully established HFD-induced NAFLD rat model, YMJO alleviated the progression of NAFLD, promoted autophagy, and inhibited ferroptosis. This regulatory mechanism is related to the activation of the AMPK pathway. Further study of the molecular mechanism via cell experiments revealed that YMJO activated FFA-induced liver cell autophagy through the AMPK signaling pathway and inhibited ferroptosis, thus alleviating the development of NAFLD. This study revealed that YMJO promotes phosphorylation by activating the AMPK pathway, enhances autophagy, ameliorates ferroptosis induced by high fat, and alleviates the occurrence and development of NAFLD.