Diabetes is associated with increased incidence of heart failure even after controlling for coronary artery disease and hypertension. Thus, as diabetic cardiomyopathy has become an increasingly recognized entity among clinicians, a better understanding of its pathophysiology is necessary for early diagnosis and the development of treatment strategies for diabetes-associated cardiovascular dysfunction. We will review recent basic and clinical research into the manifestations and the pathophysiological mechanisms of diabetic cardiomyopathy. The discussion will be focused on the structural, functional and metabolic changes that occur in the myocardium in diabetes and how these changes may contribute to the development of diabetic cardiomyopathy in affected humans and relevant animal models.