Diabetic cardiomyopathy was first defined over four decades ago. It was observed in small post-mortem studies of diabetic patients who suffered from concomitant heart failure despite the absence of hypertension, coronary disease or other likely causal factors, as well as in large population studies such as the Framingham Heart Study. Subsequent studies continue to demonstrate an increased incidence of heart failure in the setting of diabetes independent of established risk factors, suggesting direct effects of diabetes on the myocardium. Impairments in glucose metabolism and handling receive the majority of the blame. The role of concomitant impairments in lipid handling, particularly at the level of the myocardium, has however received much less attention. Cardiac lipid accumulation commonly occurs in the setting of type 2 diabetes and has been suggested to play a direct causal role in the development of cardiomyopathy and heart failure in a process termed as cardiac lipotoxicity. Excess lipids promote numerous pathological processes linked to the development of cardiomyopathy, including mitochondrial dysfunction and inflammation. Although somewhat underappreciated, cardiac lipotoxicity also occurs in the setting of type 1 diabetes. This phenomenon is, however, largely understudied in comparison to hyperglycaemia, which has been widely studied in this context. The current review addresses the changes in lipid metabolism occurring in the type 1 diabetic heart and how they are implicated in disease progression. Furthermore, the pathological pathways linked to cardiac lipotoxicity are discussed. Finally, we consider novel approaches for modulating lipid metabolism as a cardioprotective mechanism against cardiomyopathy and heart failure.