OBJECTIVE SGTL2 inhibitors increase urinary glucose excretion and have beneficial effects on cardiovascular and renal outcomes. The underlying mechanism may involve caloric restriction-like metabolic effects due to urinary glucose loss. We investigated the effects of dapagliflozin on 24-h energy metabolism and insulin sensitivity in patients with type 2 diabetes. RESEARCH DESIGN AND METHODS There were 26 patients with type 2 diabetes randomized to a 5-week double-blind, crossover study with a 6- to 8-week washout. Indirect calorimetry was used to measure 24-h energy metabolism and the respiratory exchange ratio (RER), both by whole-room calorimetry and by ventilated hood during a two-step euglycemic-hyperinsulinemic clamp. Results are presented as the differences in least squares mean (95% CI) between treatments. RESULTS Evaluable patients (n = 24) had a mean (SD) age of 64.2 (4.6) years, BMI of 28.1 (2.4) kg/m2, and HbA1c of 6.9% (0.7) (51.7 [6.8] mmol/mol). Rate of glucose disappearance was unaffected by dapagliflozin, whereas fasting endogenous glucose production (EGP) increased by dapagliflozin (+2.27 [1.39, 3.14] μmol/kg/min, P < 0.0001). Insulin-induced suppression of EGP (–1.71 [–2.75, –0.63] μmol/kg/min, P = 0.0036) and plasma free fatty acids (–21.93% [–39.31, –4.54], P = 0.016) was greater with dapagliflozin. Twenty-four-hour energy expenditure (–0.11 [–0.24, 0.03] MJ/day) remained unaffected by dapagliflozin, but dapagliflozin reduced the RER during daytime and nighttime, resulting in an increased day-to-nighttime difference in the RER (–0.010 [–0.017, –0.002], P = 0.016). Dapagliflozin treatment resulted in a negative 24-h energy and fat balance (–20.51 [–27.90, –13.12] g/day). CONCLUSIONS Dapagliflozin treatment for 5 weeks resulted in major adjustments of metabolism mimicking caloric restriction, increased fat oxidation, improved hepatic and adipose insulin sensitivity, and improved 24-h energy metabolism.