Background— Circulating lipid levels and myocardial lipid content (MyLC) is increased in type 2 diabetes mellitus. This may cause a state of lipotoxicity that compromises left ventricular function and aggravate heart failure. We investigated the relationship among circulating lipid levels, MyLC, and cardiac function together with the acute cardiac effects of high as opposed to low circulating free fatty acid (FFA) and triglyceride levels in patients with type 2 diabetes mellitus and heart failure. Methods and Results— Eighteen patients underwent 8-hour intralipid/heparin-infusion (high FFA) and hyperinsulinemic-euglycemic clamping (low FFA) in a randomized crossover–designed study. We applied magnetic resonance proton spectroscopy to measure MyLC. Cardiac function was assessed by advanced echocardiography, cardiopulmonary exercise, and MRI. MyLC correlated positively with circulating triglyceride ( r =0.47; r ² =0.22; P =0.003) and FFA ( r =0.45; r ² =0.20; P =0.001) levels and inversely with left ventricular ejection fraction ( r =−0.54; r ² =0.29; P =0.004). Circulating FFA concentrations differed between study arms (0.05±0.04 mmol/L [low FFA] versus 1.04±0.27 mmol/L [high FFA]; P <0.001) and MyLC increased from 0.78±0.59% (low FFA) to 1.16±0.73% (high FFA; P <0.01). Resting left ventricular ejection fraction and global strain did not differ between high and low FFA, whereas resting systolic mitral plane velocity (S′max) was highest during high FFA (3.6±0.8 cm/s [low FFA] versus 3.8±0.7 cm/s [high FFA]; P =0.02). Peak exercise capacity and oxygen consumption did not differ between the study arms, and neither did postexercise measurements of left ventricular ejection fraction, global strain, and S′max. Conclusions— Our findings indicate that the failing heart of patients with type 2 diabetes mellitus can adapt to short-term extreme changes in circulating substrates and does not display features of acute myocardial lipotoxicity. Clinical Trial Registration— URL: http://www.clinicaltrials.gov . Unique identifier: NCT01192373.