OBJECTIVE: Type 2 diabetes is associated with reduced exercise capacity, but the cause of this association is unclear. We sought the associations of impaired exercise capacity in type 2 diabetes. RESEARCH DESIGN AND METHODS: Subclinical left ventricular (LV) dysfunction was sought from myocardial strain rate and the basal segmental diastolic velocity (Em) of each wall in 170 patients with type 2 diabetes (aged 56 +/- 10 years, 91 men), good quality echocardiographic images, and negative exercise echocardiograms. The same measurements were made in 56 control subjects (aged 53 +/- 10 years, 29 men). Exercise capacity was calculated in metabolic equivalents, and heart rate recovery (HRR) was measured as the heart rate difference between peak and 1 min after exercise. In subjects with type 2 diabetes, exercise capacity was correlated with clinical, therapeutic, biochemical, and echocardiographic variables, and significant independent associations were sought using a multiple linear regression model. RESULTS: Exercise capacity, strain rate, Em, and HRR were significantly reduced in type 2 diabetes. Exercise capacity was associated with age (r = -0.37, P < 0.001), male sex (r = 0.26, P = 0.001), BMI (r = -0.19, P = 0.012), HbA(1c) (A1C; r = -0.22, P = 0.009), Em (r = 0.43, P < 0.001), HRR (r = 0.42, P < 0.001), diabetes duration (r = -0.18, P = 0.021), and hypertension history (r = -0.28, P < 0.001). Age (P < 0.001), male sex (P = 0.007), BMI (P = 0.001), Em (P = 0.032), HRR (P = 0.013), and A1C (P = 0.0007) were independent predictors of exercise capacity. CONCLUSIONS: Reduced exercise capacity in patients with type 2 diabetes is associated with diabetes control, subclinical LV dysfunction, and impaired HRR.