Rationale: Diabetes mellitus is associated with cardiac fibrosis. Matricellular proteins are induced in fibrotic conditions and modulate fibrogenic and angiogenic responses by regulating growth factor signaling. Objective: Our aim was to test the hypothesis that the prototypical matricellular protein thrombospondin (TSP)-1, a potent angiostatic molecule and crucial activator of transforming growth factor-β, may play a key role in remodeling of the diabetic heart. Methods and Results: Obese diabetic db/db mice exhibited marked myocardial TSP-1 upregulation in the interstitial and perivascular space. To study the role of TSP-1 in remodeling of the diabetic heart, we generated and characterized db/db TSP-1 ^–/– (dbTSP) mice. TSP-1 disruption did not significantly affect weight gain and metabolic function in db/db animals. When compared with db/db animals, dbTSP mice had increased left ventricular dilation associated with mild nonprogressive systolic dysfunction. Chamber dilation in dbTSP mice was associated with decreased myocardial collagen content and accentuated matrix metalloproteinase-2 and -9 activity. TSP-1 disruption did not affect inflammatory gene expression and activation of transforming growth factor-β/small mothers against decapendaplegic signaling in the db/db myocardium. In cardiac fibroblasts populating collagen pads, TSP-1 incorporation into the matrix did not activate transforming growth factor-β responses, but inhibited leptin-induced matrix metalloproteinase-2 activation. TSP-1 disruption abrogated age-associated capillary rarefaction in db/db mice, attenuating myocardial upregulation of angiopoietin-2, a mediator that induces vascular regression. In vitro, TSP-1 stimulation increased macrophage, but not endothelial cell, angiopoietin-2 synthesis. Conclusions: TSP-1 upregulation in the diabetic heart prevents chamber dilation by exerting matrix-preserving actions on cardiac fibroblasts and mediates capillary rarefaction through effects that may involve angiopoietin-2 upregulation.