Diabetes mellitus and heart failure are common comorbidities, and their prevalence has increased significantly over the past decade. We examined the relationships between diabetes and heart failure, the effect of commonly prescribed antidiabetic drugs on the development of heart failure, and the benefits and risks of recommended heart failure therapies in patients with diabetes. Compared with patients with heart failure who do not have diabetes, patients with both diabetes and heart failure have a poorer prognosis, including a 1.5-2-fold higher risk of mortality. Based on the results of randomized controlled trials, insulin and sulfonylureas do not appear to protect against or contribute to the development of new-onset heart failure, whereas metformin may modestly reduce the risk. The use of metformin in patients with established heart failure is controversial; retrospective analyses have shown that metformin may have a beneficial effect on outcomes, but there are no prospective, randomized clinical trials to support its use in this population. The thiazolidinediones, however, contribute to the development of heart failure and increase the risk of heart failure exacerbations particularly when used in combination with insulin. Recommendations for the treatment of symptomatic heart failure in patients with diabetes have been largely derived from post hoc analyses or preplanned subgroup analyses in landmark clinical trials. The data clearly support the use of angiotensin-converting enzyme inhibitors and angiotensin II receptor blockers for both the prevention and treatment of symptomatic heart failure in patients with diabetes. Despite concerns regarding the potential risks of beta-blockers in patients with diabetes, these drugs have a clear mortality benefit in patients with stages B and C heart failure. Therefore, patients with diabetes should not be denied beta-blocker therapy unless there is a clear contraindication. Likewise, aldosterone receptor antagonists should be added to standard therapies in patients with stages C and D heart failure. Future heart failure studies should include a sufficiently large diabetes cohort to conduct meaningful preplanned subgroup analyses that examine the effect of proposed treatments on both heart failure-related and diabetes-related outcomes.