The bioactive lipid intermediate palmitoyl CoA (PCoA) can inhibit mitochondrial ADP/ATP transport, though the physiological relevance of this regulation remains unclear. We questioned whether myocardial ischaemia was a pathological setting in which PCoA regulation of ADP/ATP transport would be beneficial. Secondly, whether the chronically elevated lipid content within the diabetic heart would make the mitochondria less sensitive to the inhibitory effects of PCoA, with detrimental consequences during ischaemia. Palmitoyl CoA acutely decreased ADP-stimulated state 3 respiration, increasing the Km for ADP 2-fold. The half maximal inhibitory concentration (IC50) of PCoA in control mitochondria was 22 µM. This inhibitory effect of PCoA on respiration was blunted in the diabetic mitochondria, with no significant difference in the Km in the presence of PCoA, and the IC50 increased to 32 µM PCoA. The competitive inhibition by PCoA was localised to the phosphorylation apparatus, particularly the ADP/ATP carrier (AAC). During ischaemia, the AAC imports ATP into the mitochondria, where it is hydrolysed by reversal of the ATP synthase, to regenerate the membrane potential. Addition of PCoA dose-dependently prevented this wasteful ATP hydrolysis for membrane repolarisation during ischaemia. However, this beneficial effect was blunted in the diabetic mitochondria. Finally, using 31P-magnetic resonance spectroscopy we demonstrated that diabetic hearts lose ATP more rapidly during ischaemia, with a 3-fold higher ATP decay rate compared with control hearts. In conclusion, PCoA plays a role in protecting mitochondrial energetics during ischaemia, by preventing wasteful ATP hydrolysis. However, this beneficial effect is blunted in diabetes, contributing to the impaired energy metabolism during myocardial ischaemia.