Background: Chronic kidney disease (CKD) and diabetes mellitus (DM) are common comorbidities in heart failure (HF) and each is associated with poor outcomes. However, the effects of multimorbidity related to having both CKD and DM compared to CKD alone have not been well studied in a propensity-matched population of chronic HF patients. Methods: Of the 7788 ambulatory chronic HF patients in the Digitalis Investigation Group trial, 3527 had CKD, of whom 1095 had DM. Based on the absence or presence of DM, patients were categorized CKD-only and CKD-DM, respectively. Propensity scores for CKD-DM were calculated for each patient and were used to match 987 pairs of CKD-only and CKD-DM patients. Hazard ratios (HR) and 95% confidence intervals (CI) comparing CKD-DM patients with CKD-only patients were estimated using matched Cox regression models. Results: All-cause mortality occurred in 47.0% (rate, 1783/10,000 person-years of follow-up) of CKD-DM patients and 39.6% (rate, 1414/10,000 person-years) of CKD-only patients (HR when CKD-DM is compared with CKD-only, 1.25; 95%-CI, 1.07-1.46; p = 0.006). All-cause hospitalization occurred in 75.4% (rate, 5710/10,000 person-years) and 67.8% (rate, 4213/10,000 person-years) of CKD-DM and CKD-only patients respectively (HR, 1.32; 95%-CI, 1.15-1.52; p < 0.0001). Respective HR and 95%-CI for other outcomes were: cardiovascular mortality (1.27; 1.06-1.52; p = 0.009), HF mortality (1.34; 1.04-1.72; p = 0.025); cardiovascular hospitalization (1.29; 1.12-1.49; p = 0.001) and HF hospitalization (1.37; 1.16-1.63; p < 0.0001). Conclusions: Compared with comorbidity due to CKD alone, multimorbidity with CKD and DM was associated with poor outcomes in chronic HF patients.