Sedentary obesity is associated with increased risk of many cardio-metabolic diseases, including type 2 diabetes. Weight loss is therefore a desirable goal for sedentary adults with obesity. Weight loss is also a well-documented side effect of sodium glucose co-transporter 2 (SGLT2) inhibition, a pharmaceutical strategy for diabetes treatment. We hypothesized that, compared with placebo, SGLT2 inhibition as an adjunct to out-patient dietary counselling for weight loss would lead to more favorable modification of body mass and composition, and greater improvement in glucose regulation and lipid profile. Using a randomized, double-blind, repeated measures parallel design, 50 sedentary men and women (body mass index: 33.4 ± 4.7 kg/m2; mean ± SD) were assigned to 12 weeks of dietary counselling, supplemented with daily ingestion of either a placebo or SGLT2 inhibitor (dapagliflozin: up to 10 mg/day). Dietary counselling favorably modified body mass, body fat, glucose regulation, and fasting concentrations of triglyceride and very low-density lipoprotein cholesterol (main effects of counselling: p < 0.05); SGLT2 inhibition did not influence any of these adaptations (counselling × medication interactions: p > 0.05). However, SGLT2 inhibition when combined with dietary counselling led to greater loss of fat-free mass (counselling × medication interaction: p = 0.047) and attenuated the rise in high-density lipoprotein cholesterol (counselling × medication interaction: p = 0.028). In light of these data and the health implications of decreased fat-free mass, we recommend careful consideration before implementing SGLT2 inhibition as an adjunct to dietary counselling for weight loss in sedentary adults with obesity.