Background Evidence is limited in comparing treatment modification by substitution or add‐on of glucose‐lowering medications in patients with type 2 diabetes. This observational study aims to compare switching versus add‐on of incretin‐based drugs among patients with type 2 diabetes on background sodium‐glucose cotransporter‐2 inhibitors (SGLT2i). Methods and Results This population‐based, retrospective cohort study was conducted using the IQVIA Medical Research Data, including adults with type 2 diabetes on background SGLT2i from 2005 to 2020. New users of incretin‐based drugs were allocated into the “Switch” group if they had discontinued SGLT2i treatment, or the “Add‐on” group if their background SGLT2i was continued. Baseline characteristics of patients were balanced between groups. Study outcomes were all‐cause mortality, cardiovascular diseases, kidney diseases, hypoglycemia, and ketoacidosis. Patients were observed from the index date of initiating incretin‐based drugs until the earliest of an outcome event, death, or data cut‐off date. Changes in anthropometric and metabolic parameters were also compared between groups from baseline to 12‐month follow‐up. A total of 2888 patients were included, classified into “Switch” (n=1461) or “Add‐on” group (n=1427). Median follow‐up was 18 months with 5183 person‐years. Overall, no significant differences in the risks of study outcomes were observed between groups; however, patients in the “Add‐on” group achieved significantly greater reductions in glycated hemoglobin, weight, percentage weight loss, and systolic blood pressure than their “Switch” counterparts. Conclusions Initiating incretin‐based drugs as add‐on among patients with type 2 diabetes on background SGLT2i was associated with risks of clinical end points comparable to switching treatments, in addition to better glycemic and weight control observed with the combination approach.