While basal insulin remains the most effective antidiabetic agent and substantially reduces the risk of hypoglycemia, few studies have examined the comparative effect of basal insulin in the real-world setting. This study aimed to assess the outcomes of adding basal insulin compared with thiazolidinediones (TZDs) or dipeptidyl peptidase-4 inhibitors (DPP-4is) as a third antidiabetic agent in patients with type 2 diabetes mellitus (T2DM). A retrospective cohort study involving T2DM was conducted with health administrative data in Taiwan. Patients starting a third antidiabetic agent after receiving a metformin-containing dual combination were identified. The study endpoints included composite major adverse cardiovascular events (MACEs), all-cause mortality, and hypoglycemia. Propensity score matching and Cox modeling were used for analysis. After matching, the basal insulin and TZD groups contained 6,101 and 11,823 patients, respectively, and the basal insulin and DPP-4i groups contained 6,051 and 11,900 patients, respectively. TZDs and DPP-4is were both associated with similar risks of MACEs and hypoglycemia but a lower risk of all-cause mortality than basal insulin (TZDs: HR 0.55, 95% CI 0.38–0.81; DPP-4is: HR 0.56, 95% CI 0.39–0.82). Further studies are needed to elucidate the findings of increased all-cause mortality risk in patients receiving basal insulin, especially those with advanced diabetes.