Background Clinical prediction models have been developed for hospitalization for heart failure in type 2 diabetes. However, a systematic evaluation of these models’ performance, applicability, and clinical impact is absent. Methods and Results We searched Embase, MEDLINE, Web of Science, Google Scholar, and Tufts’ clinical prediction registry through February 2021. Studies needed to report the development, validation, clinical impact, or update of a prediction model for hospitalization for heart failure in type 2 diabetes with measures of model performance and sufficient information for clinical use. Model assessment was done with the Prediction Model Risk of Bias Assessment Tool, and meta‐analyses of model discrimination were performed. We included 15 model development and 3 external validation studies with data from 999 167 people with type 2 diabetes. Of the 15 models, 6 had undergone external validation and only 1 had low concern for risk of bias and applicability (Risk Equations for Complications of Type 2 Diabetes). Seven models were presented in a clinically useful manner (eg, risk score, online calculator) and 2 models were classified as the most suitable for clinical use based on study design, external validity, and point‐of‐care usability. These were Risk Equations for Complications of Type 2 Diabetes (meta‐analyzed c‐statistic, 0.76) and the Thrombolysis in Myocardial Infarction Risk Score for Heart Failure in Diabetes (meta‐analyzed c‐statistic, 0.78), which was the simplest model with only 5 variables. No studies reported clinical impact. Conclusions Most prediction models for hospitalization for heart failure in patients with type 2 diabetes have potential concerns with risk of bias or applicability, and uncertain external validity and clinical impact. Future research is needed to address these knowledge gaps.