The relationship between the renin-angiotensin system (RAS) and the progression of diabetic renal disease has been a major focus of investigation over the past 20 years. More recently, experimental and clinical studies have also suggested that the RAS may have a pathogenetic role at other sites of micro- and macrovascular injury in diabetes. Complementing major advances into the understanding of the local, as distinct from the systemic RAS, a number of large clinical trials have examined whether blockade of the RAS might provide protection from the long-term complications of diabetes, beyond that due to blood pressure reduction alone. While some controversy remains, these studies have, in general, suggested that angiotensin converting enzyme (ACE) inhibition and more recently, angiotensin receptor blockade reduce the development and progression of diabetic nephropathy, cardiovascular disease and possibly retinopathy. This review will focus on recent developments in our understanding of the tissue-based RAS and its role in end-organ injury in diabetes, the results of recent clinical trials and newer strategies for the pharmacological manipulation of the RAS.