Abstract Background Heart failure (HF) with improved ejection fraction (EF), termed HFimpEF, has been proposed as a new HF classification associated with better clinical outcomes. Sodium-glucose co-transporter-2 (SGLT2) inhibitors reduce cardiovascular death and hospitalization for HF irrespective of diabetes. Purpose Analyze the effect of SGLT2 inhibitors on the development of HFimpEF. Methods Consecutive HF with reduced EF (HFrEF) patients with follow-up echocardiogram at around 12 months were enrolled from 2017 to 2022. Patients were classified into HFimpEF (follow-up EF > 40% and ≥ 10% absolute increase) or otherwise persistent HFrEF based on repeat echocardiograms after 12 months. A 1:2 propensity score matched analysis was performed. Results Of all the HFrEF patients in the cohort, 46.6% of patients developed HFimpEF. We matched 93 and 186 patients treated with or without SGLT2 inhibitors according to propensity score. In the matched cohort, treatment with SGLT2 inhibitors was associated with nearly a doubled likelihood of the development of HFimpEF (OR: 1.978 [95% CI 1.184~3.346]). Subgroup analysis revealed this association was only present in HF patients with an ischemic etiology (OR: 3.427 [95% CI 1.614~7.573], P for interaction=0.022). There was no significant interaction term between SGLT2 inhibitors and the presence of diabetes for the development of HFimpEF. Conclusions This study reveals that treatment with SGLT2 inhibitors is associated with increased likelihood of HFimpEF, especially in those with an ischemic etiology.