Dapagliflozin (Farxiga), alone, or in the fixed dose combination with metformin (Xigduo), is an orally active, highly selective, reversible inhibitor of sodium-glucose cotransporter type 2 (SGLT2) that is marketed in United States, Europe, and many other countries for the treatment of type 2 diabetes mellitus. Here we report a liquid chromatography-tandem mass spectrometry (LC-MS/MS) bioanalytical assay of dapagliflozin in human plasma. A lower limit of quantitation (LLOQ) at 0.2 ng/mL with 50 μL of plasma was obtained, which reflects a 5-fold improvement of the overall assay sensitivity in comparison to the previous most sensitive assay using the same mass spectrometry instrumentation. In this new assay, acetate adduct ions in negative electrospray ionization mode were used as the precursor ions for selective reaction monitoring (SRM) detection. Sample preparation procedures and LC conditions were further developed to enhance the column life span and achieve the separation of dapagliflozin from potential interferences, especially its epimers. The assay also quantifies dapagliflozin's major systemic circulating glucuronide metabolite, BMS-801576, concentrations in human plasma. The assay was successfully transferred to contract research organizations (CROs), validated, and implemented for the sample analysis of pediatric and other critical clinical studies. This assay can be widely used for bioanalytical support of future clinical studies for the newly approved drug Farxiga or any combination therapy containing dapagliflozin.