Large clinical trials have shown that inhibition of the renin-angiotensin system (RAS) can delay and/or prevent the onset of Type 2 diabetes mellitus (T2DM) in high-risk individuals, such as those with hypertension or chronic heart failure. Moreover, a meta-analysis of these randomized clinical studies concluded that the mean weighted relative risk of development of T2DM was reduced by 25% in those patients treated with angiotensin II receptor blockers or angiotensin-converting enzyme inhibitors. In spite of these firm clinical data, the mechanistic pathways mediating the protective activity of RAS blockade have yet to be resolved. Of particular interest is the recently identified local pancreatic RAS and, perhaps more importantly, the finding that it is up-regulated in animal models of T2DM. This putative local RAS may regulate pancreatic islet blood flow, oxygen tension, and islet (pro)insulin biosynthesis. It might also mediate the generation of reactive oxygen species, thereby causing oxidative stress-induced pancreatic beta-cell apoptosis and fibrosis. Moreover, findings that RAS blockade improved beta-cell secretory function and cell mass in experimental animal models of Type 2 diabetes indicate that inhibition of RAS activation may play a pivotal role in protecting islet cell function, and furthermore may prevent the development of overt T2DM. Such data supporting the involvement of the local pancreatic RAS in islet function, as well as a causal relationship between RAS activation and T2DM, and RAS induced beta-cell dysfunction, mandate further investigation into the role of RAS in the pathogenesis of the progressive islet impairment observed in patients with T2DM.