Since diabetic cardiomyopathy was first reported four decades ago, substantial information on its pathogenesis and clinical features has accumulated. In the heart, diabetes enhances fatty acid metabolism, suppresses glucose oxidation, and modifies intracellular signaling, leading to impairments in multiple steps of excitation-contraction coupling, inefficient energy production, and increased susceptibility to ischemia/reperfusion injury. Loss of normal microvessels and remodeling of the extracellular matrix are also involved in contractile dysfunction of diabetic hearts. Use of sensitive echocardiographic techniques (tissue Doppler imaging and strain rate imaging) and magnetic resonance spectroscopy enables detection of diabetic cardiomyopathy at an early stage, and a combination of the modalities allows differentiation of this type of cardiomyopathy from other organic heart diseases. Circumstantial evidence to date indicates that diabetic cardiomyopathy is a common but frequently unrecognized pathological process in asymptomatic diabetic patients. However, a strategy for prevention or treatment of diabetic cardiomyopathy to improve its prognosis has not yet been established. Here, we review both basic and clinical studies on diabetic cardiomyopathy and summarize problems remaining to be solved for improving management of this type of cardiomyopathy.