The phylogenetically old renin-angiotensin-system (RAS) was originally described as a circulating hormonal system and a main cardiovascular regulator. However, there also exist 'local RASs' which are situated in cardiovascular as well as non-cardiovascular tissues where they are involved in physiological and patho-physiological processes such as inflammation, fibrosis, proliferation or apoptosis. Local RASs are activated in diabetes, preferentially in organs affected by hyperglycaemic injury such as the kidney or the retina. Increased renal or retinal Ang II levels may contribute to diabetic tissue injury in two ways: (i) by stimulating the angiotensin AT1-receptor and downstream pathological chains of events and (ii) by bidirectional interaction with the 'classical' hyperglycaemia-induced pathobiochemical pathways (oxidative stress, generation of advanced glycation end products, increased polyol pathway flux, activation of protein kinase C, increased hexosamine pathway flux). The involvement of the RAS in the pathomechanisms underlying diabetic end organ damage suggests pharmacological RAS inhibition as a therapeutic approach in these disorders. This assumption has been supported by numerous animal studies. Clinically, RAS inhibition is currently the first line, guideline-approved treatment in diabetic nephropathy. The recently published DIRECT, RASS and AdRem studies provided evidence that RAS inhibition may also be beneficial in diabetic retinopathy; however, evidence for RAS-inhibition in retinopathy is still much weaker than for nephropathy. The present article reviews the emerging knowledge about cardiovascular and non-cardiovascular effects of the RAS with an emphasis on the mechanisms of RAS involvement and pharmacological RAS inhibition in diabetic end organ damage.