Heart failure and diabetes mellitus are frequently associated, with diabetes potentiating the development of heart failure after other myocardial insults. This review documents the evidence in support of a specific primary myocardial disease in diabetes. The strongest clinical evidence relates to the detection of otherwise unexplained diastolic dysfunction in apparently healthy diabetic subjects, but recent studies with sensitive echocardiographic markers have shown systolic disturbances as well. The mechanism of this myocardial disease is multifactorial, with contributions from metabolic effects on the myocyte, structural changes in the myocardium and interstitium, autonomic neuropathy, and perhaps coronary vascular disease. The common pathway appears to be related to glycemic control and new evidence suggests better metabolic control to be beneficial, as well as angiotensin-converting enzyme inhibition and cross-link breakers.