Background-Diabetes and heart failure frequently coexist. Our aim was to assess the association between diabetes and short-and long-term outcomes in all patients admitted to the hospital for the first time with heart failure in Scotland between 1986 and 2003. Methods and Results-A total of 116 556 patients were studied, of whom 13% (nϭ15 161) had a diagnosis of diabetes.At 30 days, diabetes was associated with a lower case fatality. By 1 year, the association between diabetes and better outcome was reversed, and diabetes was a significant independent predictor of higher case fatality. The longer term risk of death associated with diabetes was greatest in younger patients. In patients aged 65 years or younger, the hazard ratio for mortality at 5 years associated with diabetes was 1.41 (95% CI, 1.31 to 1.52) for men and 1.64 (1.50 to 1.79) for women. The risk associated with diabetes was less in patients aged 75 years or older: a hazard ratio in men 1.16 (1.10 to 1.22) and in women 1.15 (1.10 to 1.20). In the younger age group the risk associated with diabetes was significantly greater in women than in men (Pϭ0.005 for diabetes-sex interaction). Diabetes was also a significant independent predictor of heart failure readmission, and again the risk was greatest in younger women. Conclusions-Although diabetes was associated with a lower case fatality at 30 days, by 1 year it was a significant independent predictor of higher case fatality. The risk associated with diabetes was greatest in young patients, and in young patients the risk was greatest in women. (Circ Heart Fail. 2008;1:234-241.)