Physical performance is markedly reduced in patients with congestive heart failure, but the reason has not been precisely defined. It has been generally assumed that reduced exercise performance is related to ventricular systolic performance, or as more recently suggested, to impaired left ventricular diastolic function. However, there is no clear relationship between the indices of left ventricular performance and exercise capacity, and there is a dissociation between improvement in haemodynamic parameters and exercise performance. Recent studies suggest that peripheral changes may be major determinants of exercise performance. This may involve reduced blood flow to the exercising limbs because of impaired vasodilatory capacity or intrinsic changes in the skeletal muscle itself. In this review, these factors are considered, and the impact of different therapeutic strategies is discussed.