Diabetes mellitus increases the risk of heart failure independent of co-existing hypertension and coronary artery disease. Although several molecular mechanisms for the development of diabetic cardiomyopathy have been identified, they are incompletely understood. The pathomechanisms are multifactorial and as a consequence, no causative treatment exists at this time to modulate or reverse the molecular changes contributing to accelerated cardiac dysfunction in diabetic patients. Numerous animal models have been generated, which serve as powerful tools to study the impact of type 1 and type 2 diabetes on the heart. Despite specific limitations of the models generated, they mimic various perturbations observed in the diabetic myocardium and continue to provide important mechanistic insight into the pathogenesis underlying diabetic cardiomyopathy. This article reviews recent studies in both diabetic patients and in these animal models, and discusses novel hypotheses to delineate the increased incidence of heart failure in diabetic patients.