We recently identified a local pancreatic islet renin-angiotensin system (RAS), and demonstrated that it is upregulated in an animal model of obesity-induced type 2 diabetes mellitus (T2DM). Moreover, angiotensin II type 1 receptor (AT1R) antagonism improves beta-cell function and glucose tolerance in young T2DM mice and delays the onset of diabetes. Meanwhile, obesity-induced T2DM results in oxidative stress-mediated activation of uncoupling protein 2 (UCP2), a negative regulator of islet function. In the present study, we postulated that some of the protective effects of AT1R antagonism might be mediated through interference with this pathway and tested this hypothesis in a T2DM animal model. Losartan, an AT1R antagonist, was given to 4-week-old obese db/db mice for a period of 8 weeks. UCP2-driven oxidative damage and apoptosis were then analyzed in isolated islets. Losartan selectively inhibited oxidative stress via downregulation of NADPH oxidase; this in turn suppressed UCP2 expression, thus improving beta-cell insulin secretion and decreasing apoptosis-induced beta-cell mass loss in db/db mouse islets. These data indicate that islet AT1R activation in young diabetic mice can generate progressive islet beta-cell failure through UCP-driven oxidative damage.