Background: Patients with heart failure (HF) with diabetes mellitus have distinct biomarker profiles compared with those without diabetes mellitus. SFRP5 (secreted frizzled-related protein 5) is an anti-inflammatory adipokine with an important suppressing role on the development of type 2 diabetes mellitus (T2DM). This study aimed to evaluate the prognostic value of SFRP5 in patients with HF with and without T2DM. Methods: The study included 833 consecutive patients with HF, 312 (37.5%) of whom had T2DM. Blood samples were collected at presentation, and SFRP5 levels were measured. The primary outcome was the composite end points of first occurrence of HF rehospitalization or all-cause mortality during follow-up. Results: During median follow-up of 2.1 years, 335 (40.2%) patients in the cohort experienced the composite primary outcome. After adjustment for multiple risk factors, each doubling of SFRP5 level was associated with a 21% decreased risk of primary outcomes in the overall study population ( P <0.001). Subgroup analyses showed that the association between level of SFPR5 and primary outcomes may be stronger in patients with T2DM (hazard ratio, 0.69 [95% CI, 0.61–0.79]) than in patients without T2DM (hazard ratio, 0.89 [95% CI, 0.79–1.01]; interaction P =0.006). Similar associations were observed when taking SFRP5 as a categorical variable. Addition of SFRP5 significantly improved discrimination and reclassification of the incident primary outcomes beyond clinical risk factors and N-terminal pro-B-type natriuretic peptide in all patients with HF and those with T2DM (all P <0.01). Conclusions: SFRP5 is an independent novel biomarker for risk stratification in HF, especially in HF with T2DM.