Patients with diabetes mellitus have an increased morbidity and mortality from cardiovascular disease. Both coronary artery disease and congestive heart failure (CHF) are largely responsible for the increased cardiovascular adverse events in patients with diabetes. This review discusses the pathophysiology of CHF, the mechanisms of left ventricular (LV) dysfunction and the neurohormonal mechanisms involved in both LV dysfunction and CHF. Diabetes with and without hypertension is an important cause of LV dysfunction and CHF. Diabetes may be responsible for the metabolic and ultrastructural causes of LV dysfunction, while hypertension may be responsible for the marked fibrotic changes that are found. Experimental induction of diabetes in animals has shed light on the biochemical and ultrastructural changes seen. The role of insulin to reverse both metabolic and structural changes is reviewed both from experimental data and with the limited amount of clinical data available. The therapy of CHF in patients with diabetes is similar to that of patients without diabetes, with therapy directed toward the use of β-blockers and angiotensin converting enzyme (ACE) inhibitors. As the morbidity and mortality are higher in patients with diabetes, several studies have pointed out the importance of this subgroup where the opportunity to make a significant clinical impact exists. A significant opportunity exists to reduce morbidity and mortality with β-blockers and ACE inhibitors when ischaemia and CHF are both present. However, studies in patients diabetes have been limited to post hoc subgroup analyses and rarely as predefined subgroups. Clinical trials involving patients with diabetes with and without hypertension and LV dysfunction are clearly needed in the future to adequately address the needs of this high risk subgroup.