Using linked data from Kangbuk Samsung Health Study (>250,000 participants) and Korea’s nationwide insurance database (2013–2022), we emulated a target trial to assess the impact of timing of sodium-glucose cotransporter 2 (SGLT2) inhibitor initiation in diabetic metabolic dysfunction-associated steatotic liver disease (MASLD). We identified 7,947 patients with MASLD and preexisting type 2 diabetes mellitus, defining cohort entry as the first MASLD diagnosis. Primary outcomes included hepatic, cardiovascular, and renal complications, with separate cohorts established for each outcome. The clone-censor-weight approach was applied, assigning patients to one of three strategies: initiation within 6 months, within 1 year, or no initiation during 3-year follow-up. Clones were censored upon deviation from the assigned regimen, with inverse probability of censoring weights applied to address informative censoring. Kaplan-Meier methods estimated 3-year absolute risks, and risk ratios (RRs) were calculated using non-initiators as the reference. Early initiation within 6 months was associated with reduced risks of hepatic (RR 0.74, 95% CI 0.52–0.99), cardiovascular (0.33, 0.12–0.68), and renal (0.20, 0.11–0.30) complications. Initiation within 1 year showed RRs of 0.84 (0.40–1.15), 0.96 (0.44–1.50) and 0.35 (0.20–0.48), respectively. Our findings suggest early initiation of SGLT2 inhibitors may reduce the risk of hepatic, cardiovascular, and renal complications in diabetic MASLD.