Disruption of the mitochondrial quality surveillance (MQS) system contributes to mitochondrial dysfunction in diabetic cardiomyopathy (DCM). In this study, we observed that cardiac expression of phosphoglycerate mutase 5 (PGAM5), a mitochondrial Ser/Thr protein phosphatase, is upregulated in mice with streptozotocin-induced DCM. Notably, DCM-related cardiac structural and functional deficits were negated in cardiomyocyte-specific Pgam5 knockout (Pgam5(CKO)) mice. Hyperglycemic stress impaired adenosine triphosphate production, reduced respiratory activity, and prolonged mitochondrial permeability transition pore opening in acutely isolated neonatal cardiomyocytes from control Pgam5(f/f) mice, and these effects were markedly prevented in cardiomyocytes from Pgam5(CKO) mice. Likewise, three main MQS-governed processes-namely, mitochondrial fission/fusion cycling, mitophagy, and biogenesis-were disrupted by hyperglycemia in Pgam5(f/f), but not in Pgam5(CKO), cardiomyocytes. On the basis of bioinformatics prediction of interaction between PGAM5 and prohibitin 2 (PHB2), an inner mitochondrial membrane-associated scaffolding protein, co-immunoprecipitation, and immunoblot assays demonstrated that PGAM5 dephosphorylates PHB2 on Ser91. Transfection of cardiomyocytes with phosphodefective or phosphomimetic Ser91 mutants of PHB2 confirmed a critical role for PGAM5-mediated dephosphorylation of PHB2 in mitochondrial dysfunction associated with hyperglycemic stress. Furthermore, knockin mice expressing phosphomimetic PHB2(S91D) were resistant to diabetes-induced cardiac dysfunction. Our findings highlight the PGAM-PHB2 axis as a novel and critical regulator of mitochondrial dysfunction in DCM.