Objectives: Hypoglycemia is a limiting factor in the management of diabetes. Studies comparing oral antidiabetic medications are needed to identify treatment options that can help clinicians and patients minimize their associated hypoglycemia risk. The purpose of this study was to compare hypoglycemia rates in patients with type 2 diabetes on metformin who initiated treatment with saxagliptin versus sulfonylurea (SU). Methods: This retrospective analysis utilized US healthcare claims data from the Truven Health MarketScan Research Databases. Data were from adults on metformin monotherapy who added saxagliptin or SU between 1 August 2009 and 31 December 2010. Hypoglycemia event rates were compared during the 4 months after initiation of saxagliptin or SU. A hypoglycemia event was defined as a diagnosis of hypoglycemia on an outpatient or emergency room claim, a principal diagnosis on a hospital claim, or a glucagon injection in an outpatient setting. Patients taking SU were matched to patients taking saxagliptin (5 to 1) using propensity scores, and the rate ratio was further adjusted using multivariate regression. A total of 22,592 patients (1567 taking saxagliptin; 21,025 taking SU) qualified. Results: During 120 days of follow-up, there were 396 hypoglycemia events. Most of the hypoglycemia events (91.9%) occurred in the outpatient setting. There were no inpatient or emergency room hypoglycemia events in the saxagliptin cohort. The overall unadjusted rate of hypoglycemia was significantly lower in the saxagliptin cohort than in the SU cohort (1.74 vs 5.58 per 100 person-years; p < 0.001). The rate of hypoglycemia also was significantly lower in the saxagliptin cohort versus the propensity-matched SU cohort (1.74 vs 4.45 per 100 person-years; p = 0.005). Matching reduced the treatment effect by approximately 20%. The rate ratio comparing saxagliptin with the unmatched and propensity-matched SU cohorts was 0.31 (95% CI: 0.14–0.6) and 0.39 (95% CI: 0.17–0.77), respectively. The multivariate adjustment decreased the hypoglycemia rate ratio 0.37 (95% CI: 0.19–0.74). Conclusion: In a database reflective of real-world clinical practice, saxagliptin had a lower risk of hypoglycemia than SU in patients with type 2 diabetes receiving metformin. These results add confidence to similar findings from clinical trials.