The kidney plays an important role in protein metabolism. The albumin reabsorption in the proximal tubule is disturbed in the early stage of diabetic nephropathy. We evaluated the effects of angiotensin converting enzyme inhibitor (ACEI) and angiotensin III type 1 receptor blocker (ARB) on albumin reabsorption and expression of megalin, an endocytosis receptor for albumin, in proximal tubules of streptozotocin (STZ)-induced diabetic-rats. Diabetic rats at the second week after STZ injection were treated with quinapril (3 mg/kg/day) or candesartan (0.05 mg/kg/day) for 2 weeks. The tubular reabsorption of fluorescein isothiocyanate (FITC)-labeled albumin was evaluated by immunogold electron microscopy, and megalin expression was investigated by immunohistochemistry and Western blotting. Reabsorption of FITC-labeled albumin and megalin expression were prominently inhibited in the proximal convoluted tubules of diabetic rats compared to the controls. Both quinapril and candesartan restored albumin reabsorption in the proximal tubule due to normalization of megalin expression. Urinary albumin excretion was significantly reduced by both ACEI and ARB treatment. Angiotensin II infusion decreased megalin expression and albumin reabsorption in the proximal tubule. In conclusion, angiotensin II blockade restored albumin reabsorption via amelioration of megalin expression in the proximal tubules of early stage diabetic rats.