Background Carvedilol may have favorable glycemic properties compared with metoprolol, but it is unknown if carvedilol has mortality benefit over metoprolol in patients with type 2 diabetes (T2D) and heart failure with reduced ejection fraction (HFrEF). Methods and Results Using Danish nationwide databases between 2010 and 2018, we followed patients with new‐onset HFrEF treated with either carvedilol or metoprolol for all‐cause mortality until the end of 2018. Follow‐up started 120 days after initial HFrEF diagnosis to allow initiation of guideline‐directed medical therapy. There were 39 260 patients on carvedilol or metoprolol at baseline (mean age 70.8 years, 35% women), of which 9355 (24%) had T2D. Carvedilol was used in 2989 (32%) patients with T2D and 10 411 (35%) of patients without T2D. Users of carvedilol had a lower prevalence of atrial fibrillation (20% versus 35%), but other characteristics appeared well‐balanced between the groups. Totally 11 306 (29%) were deceased by the end of follow‐up. We observed no mortality differences between carvedilol and metoprolol, multivariable‐adjusted hazard ratio (HR) 0.97 (0.90–1.05) in patients with T2D versus 1.00 (0.95–1.05) for those without T2D, P for difference =0.99. Rates of new‐onset T2D were lower in users of carvedilol versus metoprolol; age, sex, and calendar year adjusted HR 0.83 (0.75–0.91), P <0.0001. Conclusions In a contemporary clinical cohort of HFrEF patients with and without T2D, carvedilol was not associated with a reduction in long‐term mortality compared with metoprolol. However, carvedilol was associated with lowered risk of new‐onset T2D supporting the assertion that carvedilol has a more favorable metabolic profile than metoprolol.