A cardiac event and arrhythmia detection system and method detects arrhythmic cardiac activity or other information from an electrogram signal of a heart. The system senses the electrogram signal through an electrogram lead, preliminarily processes the signal, and converts it to a plurality of discrete digital signals, each of which represents the magnitude of the electrogram signal at a prescribed sample time. The discrete digital signals are applied to both a cardiac event detector which has a dynamic threshold which is programmably adjustable so that T-waves are not sensed and a morphology detector. The morphology detector detects selected changes in the morphology (shape) of the electrogram signal, wherein such changes automatically control the sensitivity (gain and/or threshold) used to detect cardiac events. The occurrence of a prescribed amount of change in the detected morphology over time indicates the occurrence of a prescribed arrhythmic cardiac condition.