Diabetic cardiomyopathy is not only associated with heart failure but there also occurs a loss of the positive inotropic effect of different agents. It is now becoming clear that cardiac dysfunction in chronic diabetes is intimately involved with Ca(2+)-handling abnormalities, metabolic defects and impaired sensitivity of myofibrils to Ca(2+) in cardiomyocytes. On the other hand, loss of the inotropic effect in diabetic myocardium is elicited by changes in signal transduction mechanisms involving hormone receptors and depressions in phosphorylation of various membrane proteins. Ca(2+)-handling abnormalities in the diabetic heart occur mainly due to defects in sarcolemmal Na(+)-K(+) ATPase, Na(+)-Ca(2+) exchange, Na(+)-H(+) exchange, Ca(2+)-channels and Ca(2+)-pump activities as well as changes in sarcoplasmic reticular Ca(2+)-uptake and Ca(2+)-release processes; these alterations may lead to the occurrence of intracellular Ca(2+) overload. Metabolic defects due to insulin deficiency or ineffectiveness as well as hormone imbalance in diabetes are primarily associated with a shift in substrate utilization and changes in the oxidation of fatty acids in cardiomyocytes. Mitochondria initially seem to play an adaptive role in serving as a Ca(2+) sink, but the excessive utilization of long-chain fatty acids for a prolonged period results in the generation of oxidative stress and impairment of their function in the diabetic heart. In view of the activation of sympathetic nervous system and renin-angiotensin system as well as platelet aggregation, endothelial dysfunction and generation of oxidative stress in diabetes and blockade of their effects have been shown to attenuate subcellular remodeling, metabolic derangements and signal transduction abnormalities in the diabetic heart. On the basis of these observations, it is suggested that oxidative stress and subcellular remodeling due to hormonal imbalance and metabolic defects play a critical role in the genesis of heart failure during the development of diabetic cardiomyopathy.