The use of angiotensin-converting-enzyme (ACE) inhibitors has been associated with increased insulin sensitivity in diabetic patients. Although such an effect could be beneficial in the treatment of hypertension or congestive heart failure in diabetic patients, it might also precipitate severe hypoglycaemia. To test this hypothesis we carried out a nested case-control study, using data in the Dutch PHARMO system (1986-92), among diabetic patients treated with insulin or with oral antidiabetic drugs, who were admitted to hospital with hypoglycaemia. We identified 94 patients who had been admitted with hypoglycaemia and selected 654 controls from the same cohort. With adjustment for a wide range of potential confounding factors, hypoglycaemia was significantly associated with current use of ACE inhibitors (odds ratio 2.8 [95% CI 1.4-5.7]). Both among users of insulin and among users of oral antidiabetic drugs, use of ACE inhibitors was significantly associated with an increased risk of hospital admission for hypoglycaemia (2.8 [1.2-6.4] and 4.1 [1.4-12.2], respectively). Although ACE inhibitors have several advantages over other antihypertensive drugs in diabetes, the risk of hypoglycaemia should be taken into account. Further investigation of the mechanism is needed since as many as 13.8% of all hospital admissions for hypoglycaemia might be attributable to use of ACE inhibitors.