The study compared valsartan 80 mg or 160 mg o.d. with captopril 25 mg t.i.d. or placebo on plasma lipids in normotensive and treated hypertensive patients with type II diabetes and microalbuminuria. One hundred and twenty-two adult outpatients were randomised to receive either valsartan 80 mg or 160 mg, captopril 25 mg or placebo for 360 days. Changes from baseline to endpoint in plasma lipid parameters were measured. The primary criterion for tolerability was the incidence of adverse events. All treatment groups showed minor changes in lipid parameters. Triglyceride increased by 2.7% (valsartan 160 mg) to 9.1% (placebo). Total cholesterol decreased under valsartan 80 mg, while other groups showed increases of up to 0.031 mmol/l. Decreases in total cholesterol (p = 0.018), apolipoprotein B (p = 0.042) and apolipoprotein A1 (p = 0.025), were significant for the comparison of 80 mg valsartan and captopril. Valsartan 80 mg or 160 mg o.d. does not cause deleterious changes in the diabetic lipid profile and, unlike captopril, is not associated with dry cough.