Sodium-glucose transport protein 2 (SGLT2) inhibitors are a class of anti-diabetic agents; however, concerns have been raised about their potential to induce euglycemic ketoacidosis and to increase both glucose production and glucagon secretion. The mechanisms behind these alterations are unknown. Here we show that the SGLT2 inhibitor (SGLT2i) dapagliflozin promotes ketoacidosis in both healthy and type 2 diabetic rats in the setting of insulinopenia through increased plasma catecholamine and corticosterone concentrations secondary to volume depletion. These derangements increase white adipose tissue (WAT) lipolysis and hepatic acetyl-CoA content, rates of hepatic glucose production, and hepatic ketogenesis. Treatment with a loop diuretic, furosemide, under insulinopenic conditions replicates the effect of dapagliflozin and causes ketoacidosis. Furthermore, the effects of SGLT2 inhibition to promote ketoacidosis are independent from hyperglucagonemia. Taken together these data in rats identify the combination of insulinopenia and dehydration as a potential target to prevent euglycemic ketoacidosis associated with SGLT2i.