Many diabetic patients suffer from a cardiomyopathy that cannot be explained solely by poor coronary perfusion. This cardiomyopathy may be due to either organ-based damage like fibrosis, or to direct damage to cardiomyocytes. Mitochondrial-derived reactive oxygen species (ROS) have been proposed to contribute to this cardiomyopathy. To address these questions, we used the OVE26 mouse model of severe type 1 diabetes to measure contractility in isolated cardiomyocytes by edge detection and in vivo with echocardiography. We also assessed the source of ROS generation using both a general and a mitochondrial specific indicator. When contractility was assayed in freshly isolated myocytes, contraction was much stronger in control myocytes. However, contractility of normal myocytes became weaker during 24 hours of in vitro culture. In contrast, contractility of diabetic OVE26 myocytes remains stable during culture. Echocardiography revealed normal or hyperdynamic function in OVE26 hearts under basal conditions but with a sharply reduced response to isoproterenol, a beta-adrenergic agonist. For ROS generation, we found that ROS production in diabetic myocytes was elevated after exposure to either high glucose or angiotensin II (AngII). Superoxide detection with the mitochondrial sensor MitoSOX Red confirmed that mitochondria are a major source of ROS generation in diabetic myocytes. These results show that contractile deficits in OVE26 diabetic hearts are due primarily to cardiomyocyte impairment and that ROS from mitochondria are a cause of that impairment.