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Aims/Introduction Increased incidence of hospitalization for heart failure (HHF) among patients with diabetes is increasingly being reported. We investigated the incidence of adverse cardiovascular events including HHF among patients with type 2 diabetes mellitus, and the potential clinical improvement with sodium–glucose cotransporter 2 inhibitors (SGLT2i) using a contemporary administrative claims database from a large governmental district of Japan. Materials and Methods We included initiators of any oral glucose‐lowering drugs between 2013 and 2018. We estimated the 5‐year cumulative incidence of hospitalization for HF, myocardial infarction and stroke, treating death as a competing risk. We evaluated the possible impact of introducing SGLT2i to the potential recipients of the drug, using the inclusion criteria from Empagliflozin Cardiovascular Outcome Event Trial in Type 2 Diabetes Mellitus Patients (EMPA‐REG OUTCOME) and Dapagliflozin Effect on Cardiovascular Events–Thrombolysis in Myocardial Infarction 58 (DECLARE‐TIMI 58) trials, assuming the same risk reduction as theirs. Results Among 23,340 drug initiators (54.0% men, and 6.4% aged >85 years), the 5‐year cumulative incidence was 5.4% (95% confidence interval 4.9–5.9%) for HHF, 1.9% (95% confidence interval 1.7–2.2%) for myocardial infarction admission and 6.1% (95% confidence interval 5.7–6.6%) for stroke admission. Among 6,192 patients with laboratory test data, 651 (10.5%) and 2,680 (43.3%) patients met the EMPA‐REG‐like and DECLARE‐like criteria, respectively. The 5‐year cumulative incidence among the 2,849 patients meeting either of the criteria was estimated to decrease from 97.1 to 75.6 events through 75% adoption of SGLT2i. Conclusions The incidence of HHF was similar to that of stroke. A significant portion of our cohort met the inclusion criteria for major randomized clinical trials for SGLT2i, and estimated reduction in the HHF events was substantial.