Several systemic or intrarenal networks of cytokines and growth factors can be modulated by the diabetic state. We summarize the status of the renin-angiotensin system in diabetes mellitus and review the evidence of its involvement in the pathogenesis of diabetic nephropathy. Particular emphasis is placed on the nonhemodynamic properties of this vasoactive agent as both a renal growth factor and a profibrogenic peptide. Antagonizing the effects of angiotensin II with converting enzyme inhibitors is an established protective strategy in the management of diabetic nephropathy even in the absence of systemic hypertension. This and other indirect evidence from experimental animal studies suggest that the intrarenal concentration of angiotensin II may be increased as a result of increased synthesis and despite enhanced breakdown, that this peptide participates in the progression of diabetic nephropathy. However, down-regulation of angiotensin type 1 (AT1)-receptors is one of the abnormalities of both tubules and glomeruli in diabetic renal disease. A heightened bioactivation of the intrarenal angiotensin II system is therefore likely but not certain. Studies in cultured proximal tubular and glomerular mesangial cells have disclosed striking similarities between the effects of high glucose-containing medium and of treatment with angiotensin II on the growth properties and the induction of cytokines in these cells. There may also exist additive effects of angiotensin II and high glucose on signal-transduction pathways, such as activation of protein kinase C, although the contractile response to angiotensin II may be blunted by high glucose in mesangial cells. An important downstream mediator of the effects of both angiotensin II and high glucose is the activation of transforming growth factor-beta that can mediate at least some of the hypertrophic and profibrotic effects of either angiotensin II or high glucose in the diabetic kidney.