BACKGROUND Hyperuricemia, which is common in chronic kidney disease and diabetes mellitus patients, raises health concerns. Febuxostat, a first-line urate-lowering agent, prompts cardiovascular risk questions, especially in high-risk patients. This study compared the effects of febuxostat and allopurinol on cardiovascular risk in diabetes mellitus and chronic kidney disease patients. MATERIAL AND METHODS This retrospective observational cohort study, conducted using Taiwan's National Health Insurance Research Database, focused on patients diagnosed with chronic kidney disease and diabetes between January 2012 and December 2017. The study population was divided into 2 groups: allopurinol users (n=12 901) and febuxostat users (n=2997). We performed 1: 1 propensity score matching, resulting in subgroups of 2997 patients each. The primary outcomes were assessed using a competing risk model, estimating hazard ratios (HR) for long-term outcomes, including the risks of all-cause hospitalization, hospitalization for heart failure, and hospitalization for cardiovascular interventions. RESULTS Febuxostat users, compared to allopurinol users, had higher all-cause hospitalization (HR: 1.33; 95% confidence interval [CI]: 1.25 to 1.42; P<.001), hospitalization for heart failure (HR: 1.62; 95% CI: 1.43 to 1.83; P<.001), and hospitalization for cardiovascular interventions (HR: 1.51; 95% CI: 1.32 to 1.74; P<.001). Moreover, the adverse effects of febuxostat on cardiac health were consistent across most subgroups. CONCLUSIONS Use of febuxostat in patients with diabetes mellitus and chronic kidney disease is associated with higher cardiovascular risks compared to allopurinol. Prudent evaluation is essential when recommending febuxostat for this at-risk group.