Because of the unique mechanism of action of sodium‐glucose co‐transport inhibitors (SGLT2i), which is independent of insulin secretion and insulin action, members of this class of drugs effectively lower plasma glucose concentration when used in combination with all other antidiabetic agents, including insulin. Increased plasma ketone concentration has been reported in association with SGLT2i initiation, which, under certain clinical conditions, has developed into diabetic ketoacidosis. The daily insulin dose often is reduced at the time of initiating SGLT2i therapy in insulin‐treated patients to avoid hypoglycaemia. However, reduction of insulin dose can increase the risk of ketoacidosis. In the present study, we examined the effect of the addition of dapagliflozin plus pioglitazone on plasma ketone concentration in insulin‐treated T2DM patients and compared the results to the effect of dapagliflozin alone. A total of 18 poorly controlled, insulin‐treated T2DM participants in the Qatar Study received dapagliflozin (10 mg) plus pioglitazone (30 mg), and 10 poorly controlled non‐insulin‐treated T2DM patients received dapagliflozin (10 mg) alone for 4 months. Dapagliflozin plus pioglitazone produced a robust decrease in HbA1c (−1.4%) and resulted in a 50% reduction in daily insulin dose, from 133 to 66 units, while dapagliflozin alone caused a 0.8% reduction in HbA1c. Dapagliflozin caused a four‐fold increase in fasting plasma ketone concentration, while the combination of pioglitazone plus dapagliflozin was not associated with a significant increase (0.13 vs 0.15 mM) in plasma ketone concentration or in risk of hypoglycaemia. These results demonstrate that the addition of pioglitazone to dapagliflozin prevents the increase in plasma ketone concentration associated with SGLT2i therapy.