Aim: Insulin is highly recommended for diabetes management in persons with liver cirrhosis. However, insulin has some deleterious side effects, and only few studies have evaluated its long-term effects in persons with cirrhosis. We conducted this cohort study to compare the risks of all-cause mortality, liver-related complications, cardiovascular events, and hypoglycemia between insulin users and nonusers with type 2 diabetes mellitus (T2DM) and compensated liver cirrhosis. Methods: From January 1, 2000, to December 31, 2012, we selected 2047 insulin users and 4094 propensity score-matched nonusers from Taiwan’s National Health Insurance Research Database. Cox proportional hazard models with robust sandwich standard error estimates were used to assess the risks of main outcomes between insulin users and nonusers. Results: The mean follow-up time was 5.84 years. The death rate during the follow-up period was 5.28 and 4.07 per 100 person-years for insulin users and nonusers, respectively. In insulin users, the hazard ratios and 95% confidence intervals (CIs) of all-cause mortality, hepatocellular carcinoma, decompensated cirrhosis, hepatic failure, major cardiovascular events, and hypoglycemia were 1.31 (1.18-1.45), 1.18 (1.05-1.34), 1.53 (1.35-1.72), 1.26 (1.42-1.86), 1.41 (1.23-1.62), and 3.33 (2.45-4.53), respectively. Conclusions: This retrospective cohort study indicated that among persons with T2DM and compensated liver cirrhosis, insulin users demonstrated with higher risks of death, liver-related complications, cardiovascular events, and hypoglycemia compared with insulin nonusers. Therefore, vigilance is recommended when such persons use insulin.