Congestive heart failure is a major health problem in the diabetic. Diabetics have a high incidence of heart disease, including an increased incidence and severity of congestive heart failure than the non-diabetic. Progression to heart failure after an acute myocardial infarction is also more frequent in diabetics then non-diabetics. While atherosclerosis and ischemic injury are important contributing factors to this high in incidence of heart failure, another important factor is diabetes-induced changes within the heart itself. A prominent change that occurs in the diabetic is a switch in cardiac energy metabolism. Increases in fatty acid oxidation accompanied by decreases in glucose metabolism can result in the myocardium becoming almost entirely reliant on fatty acid oxidation as a source of energy. This switch in energy metabolism contributes to congestive heart failure by increasing the severity of injury following an acute myocardial infarction, and by having direct negative effects on contractile function. This paper will review the evidence linking alterations in energy metabolism to alterations in contractile function in the diabetic.