Diabetic cardiomyopathy is a controversial clinical entity that in its initial state is usually characterized by left ventricular diastolic dysfunction in patients with diabetes mellitus that cannot be explained by coronary artery disease, hypertension, or any other known cardiac disease. It was reported in up to 52–60% of well-controlled type-II diabetic subjects, but more recent studies, using standardized tissue Doppler criteria and more strict patient selection, revealed a much lower prevalence. The pathological substrate is myocardial damage, left ventricular hypertrophy, interstitial fibrosis, structural and functional changes of the small coronary vessels, metabolic disturbance, and autonomic cardiac neuropathy. Hyperglycemia causes myocardial necrosis and fibrosis, as well as the increase of myocardial free radicals and oxidants, which decrease nitric oxide levels, worsen the endothelial function, and induce myocardial inflammation. Insulin resistance with hyperinsulinemia and decreased insulin sensitivity may also contribute to the left ventricular hypertrophy. Clinical manifestations of diabetic cardiomyopathy may include dyspnea, arrhythmias, atypical chest pain, and dizziness. Currently, there is no specific treatment of diabetic cardiomyopathy that targets its pathophysiological substrate, but various therapeutic options are discussed that include improving diabetic control with both diet and drugs (metformin and thiazolidinediones), the use of ACE inhibitors, beta blockers, and calcium channel blockers. Daily physical activity and a reduction in body mass index may improve glucose homeostasis by reducing the glucose/insulin ratio and the increase of both insulin sensitivity and glucose oxidation by the skeletal and cardiac muscles.