Diabetic nephropathy often co-exists with other manifestations of microangiopathy, in particular retinopathy. Recent clinical evidence suggests that inhibition of the renin-angiotensin system in humans can delay the development and/or progression of diabetic nephropathy and perhaps also retinopathy. The benefits of this therapeutic strategy may in part be explained by inhibition of the nonhaemodynamic actions of angiotensin II (Ang II). The recognized nonhaemodynamic actions of Ang II include the augmented release of many growth factors. Ang II can stimulate the release of vascular endothelial growth factor (VEGF) from human vascular tissues. VEGF is a family of potent cytokines which act to induce angiogenesis and markedly increase microvascular permeability. VEGF is abundantly expressed in the renal glomerulus, specifically within the podocyte, where its function is unknown. VEGF is also expressed in the retina and increased retinal VEGF expression occurs in diabetes and has been implicated in the pathogenesis of diabetic retinopathy. This review considers the potential clinical significance of Ang II-induced VEGF expression, if any, in the pathogenesis of diabetic nephropathy and retinopathy.