Background/purpose: Management of type 2 diabetes mellitus (T2DM) in patients with liver cirrhosis is complex and suboptimal, but no clinical trial has adequately investigated antidiabetic drug use for such patients. We evaluate the risk of mortality, cardiovascular events, and hepatic outcomes between dipeptidyl peptidase-4 (DPP-4) inhibitor users and nonusers in patients with type 2 diabetes mellitus (T2DM) and cirrhosis. Methods: We selected 2828 paired propensity score matched DPP-4 inhibitor users and nonusers from a cohort of T2DM with compensated liver cirrhosis between January 1, 2007, and December 31, 2012. Cox proportional hazards models were used to assess the risk of main outcomes for DPP-4 inhibitor users. Results: The incidence rate of decompensated cirrhosis during follow-up was 2.20 and 1.53 per 100 patient-years (adjusted hazard ratio [aHR] 1.35, 95% confidence interval [CI] 1.03–1.77) for DPP-4 inhibitor users and nonusers, respectively. The aHRs (95% CI) of variceal bleeding and hepatic failure were 1.67 (1.11–2.52) and 1.35 (1.02–1.79), respectively, for DPP-4 inhibitor users over nonusers. The risk of all-cause mortality, hepatocellular carcinoma, and major cardiovascular events between DPP-4 inhibitor users and nonusers were not statistically different. Conclusions: This study found that DPP-4 inhibitor users were associated with higher risks of decompensated cirrhosis and hepatic failure than did nonusers among patients with T2DM and compensated liver cirrhosis. We must continue to search for appropriate antidiabetic drugs for patients with liver cirrhosis.