Concomitant type 2 diabetes and chronic kidney disease increases the risk of heart failure. Recent studies demonstrate beneficial effects of sodium-glucose cotransporter 2 (SGLT2) inhibitors on chronic kidney disease progression and heart failure hospitalization in patients with and without diabetes. In addition to inhibiting glucose reabsorption, SGLT2 inhibitors decrease proximal tubular sodium reabsorption, possibly leading to transient natriuresis. We review the hypothesis that SGLT2 inhibitor's natriuretic and osmotic diuretic effects mediate their cardioprotective effects. The degree to which these benefits are related to changes in sodium, independent of the kidney, is currently unknown. Aside from effects on osmotically active sodium, we explore the intriguing possibility that SGLT2 inhibitors could also modulate nonosmotic sodium storage. This alternative hypothesis is based on emerging literature that challenges the traditional 2-compartment model of sodium balance to provide support for a 3-compartment model that includes the binding of sodium to glycosaminoglycans, such as those in muscles and skin. This recent research on nonosmotic sodium storage, as well as direct cardiac effects of SGLT2 inhibitors, provides possibilities for other ways in which SGLT2 inhibitors might mitigate heart failure risk. Overall, we review the effects of SGLT2 inhibitors on sodium balance and sensitivity, cardiac tissue, interstitial fluid and plasma volume, and nonosmotic sodium storage.