Aim Heart failure (HF) and diabetes mellitus (DM) are each associated with cognitive impairment and disability. The aim of the present study was to evaluate the impact of DM on cognitive impairment and functional status in elderly hospitalized patients affected by HF. Methods A total of 79 elderly hospitalized patients with HF were enrolled in the present study. They underwent physical and instrumental examination, and geriatric multidimensional assessment including Mini‐Mental State Examination (MMSE), Geriatric Depression Scale (GDS), activities of daily living (ADL) and instrumental activities of daily living (IADL). Differences between groups were established by t‐test, Spearman's correlation coefficient was searched to examine the relation between variables. All results were considered significant if P was <0.05. Results HF and DM coexisted in 43 patients (54.4% of cases); when they occurred together patients showed, compared with non diabetic patients, a greater clinical severity of HF (44.2% were in New York Heart Association class IV vs 16.7%, P = 0.017), a lower MMSE score (20.4 ± 3.6 vs 23 ± 3.8, P = 0.004), and a lower number of preserved functions in ADL (3 ± 1.6 vs 4 ± 1.8, P = 0.008) and in IADL (3.2 ± 1.7 vs 4.6 ± 2.3, P = 0.003). The correlation between DM and cognitive impairment, and disability was confirmed by multivariate and univariate analysis. Conclusions We confirm that DM is frequent in elderly hospitalized patients with HF, and we report that it has a negative impact on cognitive functions and functional status, worsening cognitive impairment, and disability observed in these patients. Comprehensive geriatric assessment is necessary for older adults with HF, especially when DM coexists. Geriatr Gerontol Int 2013; ●●: ●●–●●.