Heart failure (HF) with preserved left ventricular ejection fraction (LVEF) and diabetes commonly coexist, but the impact of diabetes on HF outcomes in patients with HF and preserved LVEF has not been well studied. We assessed the risk of HF death or hospitalization for worsening HF associated with diabetes by studying 987 patients with HF and preserved LVEF enrolled in the Digitalis Investigation Group (DIG) ancillary study. Diabetics (n = 285, 28.9%) were younger, had a larger body mass index, faster heart rate, and higher pulse pressure than nondiabetics. Diabetics were also more likely to be women, have a history of hypertension, ischemic cause for HF, and were more likely to be treated with diuretics. During the mean follow-up of 37 months, 88 (30.9%) diabetics and 133 (19.0%) nondiabetics developed the primary outcome of HF hospitalization or HF death. After adjustments for baseline differences, diabetes was associated with a 68% increased risk of HF hospitalization or HF death (adjusted hazard ratio 1.68, 95% confidence interval 1.26 to 2.25, p <0.001). In conclusion, in patients with HF and preserved LVEF, diabetes is associated with significantly increased risk of developing adverse HF outcomes.