Diabetes and insulin resistance are associated with an increased risk of hypertension and cardiovascular disease. Recent evidence demonstrates that AT2 receptors (AT2R) play an important role in the hemodynamic control of hypertension by vasodilation. The quantitative significance of AT2R in the establishment of diabetic vascular dysfunction, however, is not well defined and needs further investigation. Goto-Kakizaki (GK) rats, a polygenic model of spontaneous normotensive type 2 diabetes, were used to examine any abnormalities in cardiovascular function associated with AT2R at the early stage of the disease without endothelium influence. Using a myograph to measure the isometric force, we observed that ANG II-induced contraction was impaired in denuded GK aorta compared with control Wistar-Kyoto (WKY) aorta and exhibited a retarded AT1R antagonist response and enhanced Rho kinase signaling. When AT1R were blocked, ANG II induced a significant vasodilation of precontracted GK aorta via AT2R. The protein and mRNA of AT2R were increased in diabetic GK denuded aorta. Blocking AT2R restored the ANG II-induced contraction in the GK vasculature to control levels, demonstrating a counteractive role for AT2R in AT1R-induced contraction. Inhibition of inducible nitric oxide synthase (iNOS) by NG-monomethyl-L-arginine mimicked AT2R inhibition in denuded GK aorta, suggesting that AT2R-induced vasodilation was dependent on iNOS/NO generation. The protein and mRNA of iNOS were also increased in GK aorta. In conclusion, these results clearly demonstrate that enhanced AT2R and iNOS-induced, NO-mediated vasodilation impair ANG II-induced contraction in an endothelium-independent manner at the early stage of type 2 diabetes.