Background: The relationship between various blood glucose-lowering treatments for type 2 diabetes mellitus (T2DM) and the mortality and complication rates of COVID-19 infection holds significant relevance. Objectives: This retrospective study aimed to investigate the clinical progression of COVID-19 in T2DM patients previously treated with sitagliptin, metformin, or a combination of both. Methods: The study reviewed the medical records of T2DM patients with COVID-19 who had received treatment with sitagliptin, metformin, or both. Participants were selected from those admitted to Naft Hospital in Ahvaz, Iran, from March 2020 to March 2022. Data on mortality and adverse outcomes related to COVID-19 were gathered from the medical records. Results: The study included 529 diabetic patients treated with metformin (n = 197), sitagliptin (n = 231), or both (n = 101) for a minimum of three months. The overall mortality rate among diabetic patients was 15.1%, with the metformin group showing the highest mortality rate at 28.9% (P < 0.0001). Significant differences were observed among the three treatment groups in terms of the frequency of acute respiratory failure (P < 0.0001), stroke (P = 0.002), pulmonary embolism (P < 0.0001), and the necessity for ICU admission (P < 0.0001). Nonetheless, the incidence of myocardial infarction did not significantly differ between the groups. Conclusions: The findings suggest that sitagliptin use for blood sugar control in T2DM patients may help reduce adverse outcomes and the risk of death due to COVID-19. Mortality and morbidity rates were found to be higher in patients treated with metformin compared to those in the other groups.