Background: Heart failure is a leading cause for hospital readmission. Digoxin use may lower this risk in patients with heart failure with reduced ejection fraction (HFrEF), but data on contemporary patients receiving other evidence-based therapies are lacking. Methods: Of the 11,900 patients with HFrEF (ejection fraction ≤ 45%) in Medicare-linked OPTIMIZE-HF, 8401 were not on digoxin, of whom 1571 received discharge prescriptions for digoxin. We matched 1531 of these patients with 1531 not receiving digoxin by propensity scores for digoxin use. The matched cohort (n = 3062; mean age, 76 years; 44% women; 14% African American) was balanced on 52 baseline characteristics. We assembled a second matched cohort of 2850 patients after excluding those with estimated glomerular filtration rate < 15 mL/min/1.73 m2 and heart rate < 60 beats/min. Hazard ratios (HRs) and 95% confidence intervals (CIs) for digoxin-associated outcomes were estimated in the matched cohorts. Results: Among the 3062 matched patients, digoxin use was associated with a significantly lower risk of heart failure readmission at 30 days (HR, 0.74; 95% CI, 0.59-0.93), 1 year (HR, 0.81; 95% CI, 0.72-0.92), and 6 years (HR, 0.90; 95% CI 0.81-0.99). The association with all-cause readmission was significant at 1 and 6 years but not 30 days. There was no association with mortality. Similar associations were observed among the 2850 matched patients without bradycardia or renal insufficiency. Conclusions: Among hospitalized older patients with HFrEF receiving contemporary treatments for heart failure, digoxin use is associated with a lower risk of hospital readmission but not all-cause mortality.