Angiotensin-converting enzyme 2 (ACE2) is a recently discovered homologue of the key enzyme of the renin-angiotensin system, the angiotensin-converting enzyme. The ACE2 enzyme is mainly expressed in cardiac blood vessels and tubular epithelia of the kidneys. Together with ACE2's unique metallocarboxypeptidase activity, the restricted tissue distribution suggests a distinctive physiological function in blood pressure, blood flow and fluid regulation. The ace2 gene was mapped to quantitative trait loci affecting susceptibility to hypertension in rats. Furthermore, ACE2 appears to be a negative regulator of ACE in the heart. ACE2 messenger RNA and protein levels are substantially regulated in the kidney of diabetic and pregnant rats. The mechanism of ACE2 function and its physiologic significance are not yet fully understood; however, as ACE2 differs in its specificity and physiological role from ACE, this opens a new potential venue for drug discovery aimed at cardiovascular disease, hypertension and diabetic complications.