1. (Pro)renin receptor (PRR) binding to renin or prorenin mediates angiotensin (Ang) II-dependent and -independent effects. Expression of the PRR is increased in kidneys of diabetic rats, but its role in diabetic nephropathy is unknown. In the present study, we investigated the contribution of the PRR to the development of diabetic nephropathy through enhancement of renal production of tumour necrosis factor (TNF)-alpha and interleukin (IL)-1beta. 2. Normoglycaemic control and streptozotocin-diabetic Sprague-Dawley rats were used in the study. The urine albumin : creatinine ratio (UACR), renal interstitial fluid (RIF) levels of AngII, TNF-alpha and IL-1beta and renal expression of TNF-alpha and IL-1beta were evaluated in control, untreated diabetic and diabetic rats treated with either a PRR blocker (PRRB; 0.2 mg/kg per day NH3-RILLKKMPSV-COOH), the AT(1) receptor antagonist valsartan (2 mg/kg per day) or combined therapy, administered directly into the renal cortical interstitium for 14 days via osmotic minipumps. 3. Compared with values in normoglycaemic control rats, UACR and RIF AngII, TNF-alpha and IL-1beta were significantly higher in untreated diabetic rats. Treatment of diabetic rats with the PRRB or valsartan alone and in combination significantly reduced UACR and RIF TNF-alpha and IL-1beta levels. Renal expression of TNF-alpha and IL-1beta was higher in untreated diabetic rats than in control rats, but was reduced significantly following treatment with PRRB or valsartan alone and in combination. Renal PRR expression was increased in untreated and PRRB-treated diabetic rats and reduced in rats receiving valsartan alone or combination therapy. The PRRB had no effect on RIF AngII levels, whereas valsartan alone and in combination with the PRRB significantly increased AngII levels. 4. In conclusion, the PRR is involved in the development and progression of kidney disease in diabetes by enhancing renal production of the inflammatory cytokines TNF-alpha and IL-1beta, independent of renal AngII effects.