Angiotensin-(1-7) (Ang-(1-7)) is now considered to be a biologically active member of the renin-angiotensin system. The functions of Ang-(1-7) are often opposite to those attributed to the main effector component of the renin-angiotensin system, Ang II. Chronic administration of angiotensin-converting enzyme inhibitors (ACEI) increases 10- to 25-fold the plasma levels of this peptide, suggesting that part of the beneficial effects of ACEI could be mediated by Ang-(1-7). Ang-(1-7) can be formed from Ang II or directly from Ang I. Other enzymatic pathways for Ang-(1-7) generation have been recently described involving the novel ACE homologue ACE2. This enzyme can form Ang-(1-7) from Ang II or less efficiently by the hydrolysis of Ang I to Ang-(1-9) with subsequent Ang-(1-7) formation. The biological relevance of Ang-(1-7) has been recently reinforced by the identification of its receptor, the G-protein-coupled receptor Mas. Heart and blood vessels are important targets for the formation and actions of Ang-(1-7). In this review we will discuss recent findings concerning the biological role of Ang-(1-7) in the heart and blood vessels, taking into account aspects related to its formation and effects on these tissues. In addition, we will discuss the potential of Ang-(1-7) and its receptor as a target for the development of new cardiovascular drugs.