Patients with peripheral arterial disease (PAD) have lower functional capacity and worse clinical outcomes than age- and gender-matched patients. Few data exist on the relation of PAD to functional and clinical outcomes in patients with heart failure (HF). We sought to compare patients with HF with and without PAD for baseline functional capacity, response to exercise training, and clinical outcomes. HF-ACTION was a randomized controlled trial comparing usual care to structured exercise training plus usual care in patients with HF and an ejection fraction ≤35% and New York Heart Association class II to IV HF symptoms. Cardiopulmonary exercise testing occurred at enrollment, 3 months, and 1 year. Clinical follow-up occurred up to 4 years. Of the 2,331 HF-ACTION patients, 157 (6.8%) had PAD. At baseline, patients with HF and PAD had a shorter exercise duration (8.0 vs 9.8 minutes, p <0.001), lower peak oxygen consumption (12.5 vs 14.6 ml/kg/min, p <0.001), and shorter 6-minute walking distance (306 vs 371 m, p <0.001) compared to patients with HF without PAD. At 3 months patients with HF and PAD had less improvement on cardiopulmonary exercise testing (exercise duration 0.5 vs 1.1 minutes, p = 0.002; mean change in peak oxygen consumption 0.1 vs 0.6 ml/kg/min, p = 0.04) compared to patients with HF without PAD. PAD was an independent predictor of all-cause death or hospitalization (hazard ratio 1.31, 95% confidence interval 1.06 to 1.62, p = 0.011). Patients with PAD and HF had deceased baseline exercise capacity and decreased response to exercise training. In conclusion, PAD is an independent predictor of all-cause death or hospitalization in patients with HF.