Diabetic cardiomyopathy (DCM) is a cardiac complication specific to individuals with diabetes. It is defined as abnormalities of myocardial structure and function in diabetic patients who do not exhibit any obvious coronary artery disease, hypertensive heart disease, valvular heart disease, or inherited cardiomyopathy. A significant cardiovascular protective factor identified recently is angiotensin-converting enzyme 2 (ACE2), which is a rising star in the renin angiotensin system (RAS) and is responsible for the onset and progression of DCM. Nonetheless, there is not a comprehensive review outlining ACE2's effect on DCM. From the perspective of the pathogenesis of DCM, this review summarizes the myocardial protective role of ACE2 in the aspects of alleviating myocardial structure and dysfunction, correcting energy metabolism disorders, and restoring vascular function. Concurrently, we propose the connections between ACE2 and underlying signaling pathways, including ADAM17, Apelin/APJ, and Nrf2. Additionally, we highlight ACE2-related pharmaceutical treatment options and clinical application prospects for preventing and managing DCM. Further and underlying research is extensively required to completely comprehend the principal pathophysiological mechanism of DCM and the distinctive function of ACE2, switching experimental findings into clinical practice and identifying efficient therapeutic approaches.