Although several randomized clinical trials have reported the potential benefit of sodium-glucose cotransporter 2 inhibitors (SGLT2i) in reducing blood pressure (BP), whether SGLT2i can reduce incident hypertension is unknown. We analyzed individuals with diabetes who were newly prescribed SGLT2i or dipeptidyl peptidase 4 inhibitors (DPP4i) in a large-scale epidemiological database. The primary outcome was the incidence of hypertension. A propensity score matching algorithm was employed to compare the subsequent development of hypertension between the SGLT2i and DPP4i groups. After propensity score matching, 5708 well-balanced pairs of SGLT2i and DPP4i users were identified. SGLT2i administration was associated with a reduced risk of hypertension (HR 0.91, 95% CI: 0.84–0.97). The advantage of SGLT2i use over DPP4i use for incident hypertension was generally consistent in several sensitivity analyses, and subgroup analyses showed that SGLT2i use was significantly associated with a lower risk of hypertension in men, patients with baseline HbA1c of <7.5%, and baseline systolic blood pressure ≥127 mmHg. Our investigation using nationwide real-world data demonstrated the potential advantage of SGLT2i over DPP4i in reducing the development of hypertension in individuals with diabetes.