Using some of the highest resolution cosmological simulations ever produced of Milky Way-mass galaxies that include both baryons and dark matter, I will show that the inclusion of baryonic physics alleviates some of the most worrying tensions between observations of dwarf galaxies and the predictions of the Cold Dark Matter model. I will show that baryonic processes significantly reduce the dark matter mass in the central regions of field and satellite dwarf galaxies, thereby: i) resolving the cusp/core problem in isolated field dwarfs, ii) reproducing the observed internal dynamics of Milky Way and M31 satellites as a function of luminosity,  and iii) resolving the missing satellite problem at the massive end of the satellite mass function.