Cardiovascular complications account for significant morbidity and mortality in the diabetic population. Diabetic cardiomyopathy, a prominent cardiovascular complication, has been recognized as a microvascular disease that may lead to heart failure. Pathogenesis of diabetic cardiomyopathy involves vascular endothelial cell dysfunction, as well as myocyte necrosis. Clinical trials have identified hyperglycemia as the key determinant in the development of chronic diabetic complications. Sustained hyperglycemia induces several biochemical changes including increased non-enzymatic glycation, sorbitol-myoinositol-mediated changes, redox potential alterations, and protein kinase C (PKC) activation, all of which have been implicated in diabetic cardiomyopathy. Other contributing metabolic abnormalities may include defective glucose transport, increased myocyte fatty acid uptake, and dysmetabolism. These biochemical changes manifest as hemodynamic alterations and structural changes that include capillary basement membrane (BM) thickening, interstitial fibrosis, and myocyte hypertrophy and necrosis. Diabetes-mediated biochemical anomalies show cross-interaction and complex interplay culminating in the activation of several intracellular signaling molecules. Studies in both animal and human diabetes have shown alteration of several factors including vasoactive molecules that may be instrumental in mediating structural and functional deficits at both the early and the late stages of the disease. In this review, we will highlight some of the important vascular changes leading to diabetic cardiomyopathy and discuss the emerging potential therapeutic interventions.