Heart failure (HF) is a major contributor to poor quality of life, a leading cause of hospitalization, and cause of premature death. Both kidney disease and diabetes are major and independent risk factors for the development of heart failure, such that individuals with diabetic nephropathy are at especially high risk. Such patients not only are likely to have coronary artery disease and hypertension but also are likely to have diabetic cardiomyopathy, a distinct pathologic entity that is more closely associated with the microvascular than the macrovascular complications of diabetes. In addition to a better understanding of the epidemiology of HF, advances in noninvasive imaging have highlighted the importance of early cardiac dysfunction in diabetes and the high prevalence of HF with preserved left ventricular systolic function. Although significant renal dysfunction is usually an exclusion criterion in HF trials, diabetes is often a prespecified subgroup so that subanalyses of large multicenter clinical trials do provide some guidance in therapeutic decision-making. However, further therapies for both HF and nephropathy in diabetes clearly are needed, and a number of new therapeutic strategies that target both disorders have already entered the clinical arena.