Angiotensin II (AngII) has been shown to play a critical role in diabetic nephropathy and vasculopathy. Although it is well recognized that an angiotensin-converting enzyme (ACE)-dependent AngII-generating system is a major source of intrarenal AngII production, it is here reported that the chymase-dependent AngII-generating system is upregulated in the human diabetic kidney. This becomes particularly strong in those with hypertension. In the normal kidney, while ACE was constitutively expressed by most kidney cells, chymase was weakly expressed by mesangial cells (MC) and vascular smooth muscle cells (VSMC) only. In the diabetic kidney, while ACE expression was significantly upregulated (1 to 3-fold) by tubular epithelial cells (TEC) and infiltrating mononuclear cells, there was also markedly increased chymase expression (10 to 15-fold) by both MC and VSMC, with strong deposition in the collagen-rich extracellular matrix including both diffuse and nodular glomerulosclerosis, tubulointerstitial fibrosis, and vascular sclerosis. Interestingly, while ACE expression showed no difference in patients with or without hypertension, upregulation of chymase in hypertensive patients was much stronger than that seen in those without hypertension (4 to 7-fold, P < 0.001). Correlation analysis showed that, in contrast to the ACE expression, upregulation of chymase correlated significantly with the increase in BP and the severity of collagen matrix deposition within the glomerulus, tubulointerstitium, and arterial walls (all with P < 0.001). In conclusion, the present study demonstrates that chymase, as an alternative AngII-generating enzyme, is markedly upregulated in the diabetic kidney and may be associated with the development of diabetic/hypertensive nephropathy. In addition, differential expression of ACE and chymase in the diabetic kidney indicates that both ACE and chymase may be of equal importance for AngII-mediated diabetic nephropathy and vascular disease. Results from this study suggest that blockade of both AngII-generating pathways may provide additional beneficial effect on diabetic nephropathy.