Angiotensin II and other components of the renin-angiotensin-aldosterone system (RAAS) have a central role in the pathogenesis and progression of diabetic renal disease. A study in patients with type 1 diabetes and overt nephropathy found that RAAS inhibition with angiotensin-converting-enzyme (ACE) inhibitors was associated with a reduced risk of progression to end-stage renal disease and mortality compared with non-RAAS-inhibiting drugs. Blood-pressure control was similar between groups and proteinuria reduction was responsible for a large part of the renoprotective and cardioprotective effect. ACE inhibitors can also prevent microalbuminuria in patients with type 2 diabetes who are hypertensive and normoalbuminuric; in addition, ACE inhibitors are cardioprotective even in the early stages of diabetic renal disease. Angiotensin-II-receptor blockers (ARBs) are renoprotective (but not cardioprotective) in patients with type 2 diabetes and overt nephropathy or microalbuminuria. Studies have evaluated the renoprotective effect of other RAAS inhibitors, such as aldosterone antagonists and renin inhibitors, administered either alone or in combination with ACE inhibitors or ARBs. An important task for the future will be identifying which combination of agents achieves the best renoprotection (and cardioprotection) at the lowest cost. Such findings will have major implications, particularly in settings where money and facilities are limited and in settings where renal replacement therapy is not available and the prevention of kidney failure is life saving.