Isolated diastolic dysfunction is found in almost half of asymptomatic patients with well-controlled diabetes and may precede diastolic heart failure. However, the mechanisms that underlie diastolic dysfunction during diabetes are not well understood. We tested the hypothesis that isolated diastolic dysfunction is associated with impaired myocardial calcium (Ca²⁺) handling during type 1 diabetes. Streptozotocin-induced diabetic rats were compared to age-matched placebo-treated rats. Global left ventricular myocardial performance and systolic function were preserved in diabetic animals. Diabetes-induced diastolic dysfunction was evident on Doppler flow imaging, based on the altered patterns of mitral inflow and pulmonary venous flows. In isolated ventricular myocytes, diabetes resulted in significant prolongation of the action potential duration compared to controls (APD95 increased by 93% at 2 Hz, P<0.05), with afterdepolarizations occurring in diabetic myocytes (P<0.05). Sustained outward K⁺ currents and outward IK₁ were reduced in diabetic myocytes, while I_to was increased. There was no significant change in L-type Ca²⁺ current; however, the Ca²⁺ transient amplitude was reduced and the transient decay was prolonged by 38% in diabetic compared to control myocytes (P<0.05). SR Ca²⁺ load (estimated by measuring caffeine-evoked INCX and Ca²⁺ transient amplitudes) was reduced by ~50% in diabetic myocytes (P<0.05). In permeabilized myocytes, Ca²⁺ spark amplitude and frequency were reduced by 34 and 20%, respectively, in diabetic compared to control myocytes (P<0.05). SERCA2a protein levels were decreased during diabetes. These data suggest that in vitro impairment of Ca²⁺ reuptake during myocyte relaxation contributes to in vivo diastolic dysfunction, with preserved global systolic function, during diabetes.