Heart failure (HF) mortality among older adults with type 2 diabetes (T2D) in the US is increasing, as are extreme heat events.  HF patients are heat sensitive and especially vulnerable in the 30 days after hospitalization. This may be especially true of those with existing mental health conditions. Using Medicare claims data on a cohort of adults with T2D discharged following a heart failure hospitalization between 2015 and 2019, we examined mental health severity, extreme heat event (EHE), and risk of the composite outcome of 30-day re-hospitalization or all-cause mortality. EHE was defined as ≥2 consecutive days with Max Heat Index ≥ county-specific 95th percentile during the warm season (May 1 – September 30). A 1-year lookback ensured capture of an active T2D diagnosis, no prior HF hospitalization, and ability to classify existing mental health status. We focused on the role of mental health, using the presence of ICD-10 diagnosis codes F20-F49 and dispensed medications to define mental health groups (no/low, moderate, and severe). Cox proportional hazard models with time varying EHE exposure adjusted for demographics, climate region, temporal indicators, comorbidities, and county characteristics estimated HRs and 95% CIs. Among 186,201 included individuals, 13,582 were exposed to an EHE over the study period. Compared to those with severe mental health, those with moderate mental health status had reduced risk of the outcome (HR: 0.92; 95%CI: 0.90,0.95) and those with no/low mental health conditions had even more reduced risk (HR: 0.80; 95%CI: 0.78,0.82). We examined modification by mental health severity of the EHE exposure and our outcome, but did not observe statistically significant associations, though data were less powered to detect effects. Mental health status is an important consideration in discharge of T2D patients following heart failure hospitalization. More research on timing of EHEs may elucidate potential heat impacts by mental health status.