Angiotensin converting enzyme (ACE) inhibitors produce a number of beneficial effects in a condition where diabetes - mellitus and hypertension co-exist. The present investigation was undertaken to study the effect of chronic treatment with losartan (2mg/kg, p.o.) on streptozotocin (STZ)-induced (45mg/kg, single dose, tail vein) diabetic nephropathy in rats. Treatment of rats with STZ produced a significant loss of body weight, polyuria. polydipsia, hypoinsulinemia, hyperglycemia and increase in blood pressure. There was a significant increase in blood glucose levels in STZ-diabetic rats. Serum cholesterol, creatinine, urea and blood urea nitrogen (BUN) levels were found to be increased significantly in the STZ group diabetic rats. Treatment with losartan significantly prevented the raise in cholesterol, creatinine, urea and blood urea nitrogen levels. Creatinine clearance was significantly less in STZ-diabetic rats as compared to control animals and treatment with losartan significantly increased creatinine clearence. Our data suggest a beneficial effect of losartan in STZ-induced nephropathy in rats.