Thyroid dysfunction is common in individuals with diabetes mellitus (DM) and may contribute to the associated cardiac dysfunction. However, little is known about the extent and pathophysiological consequences of low thyroid conditions on the heart in DM. DM was induced in adult female Sprague Dawley (SD) rats by injection of nicotinamide (N; 200 mg/kg) followed by streptozotocin (STZ; 65 mg/kg). One month after STZ/N, rats were randomized to the following groups (N = 10/group): STZ/N or STZ/N + 0.03 μg/mL T3; age-matched vehicle-treated rats served as nondiabetic controls (C). After 2 months of T3 treatment (3 months post-DM induction), left ventricular (LV) function was assessed by echocardiography and LV pressure measurements. Despite normal serum thyroid hormone (TH) levels, STZ/N treatment resulted in reductions in myocardial tissue content of THs (T3 and T4: 39% and 17% reduction versus C, respectively). Tissue hypothyroidism in the DM hearts was associated with increased DIO3 deiodinase (which converts THs to inactive metabolites) altered TH transporter expression, reexpression of the fetal gene phenotype, reduced arteriolar resistance vessel density, and diminished cardiac function. Low-dose T3 replacement largely restored cardiac tissue TH levels (T3 and T4: 43% and 10% increase versus STZ/N, respectively), improved cardiac function, reversed fetal gene expression and preserved the arteriolar resistance vessel network without causing overt symptoms of hyperthyroidism. We conclude that cardiac dysfunction in chronic DM may be associated with tissue hypothyroidism despite normal serum TH levels. Low-dose T3 replacement appears to be a safe and effective adjunct therapy to attenuate and/or reverse cardiac remodeling and dysfunction induced by experimental DM.