The basis for accelerated atherosclerosis in diabetes is unclear. Diabetes is associated with loss of heparan sulfate (HS) from the liver, which may impede lipoprotein clearance and thereby worsen atherosclerosis. To study hepatic HS loss in diabetes, we examined regulation of HS N-deacetylase/N-sulfotransferase-1 (NDST), a key enzyme in hepatic HS biosynthesis. Hepatic NDST mRNA, protein, and enzymatic activity were suppressed by >50% 2 weeks after induction of type 1 diabetes in rats. Treatment of diabetic rats with enalapril, an ACE inhibitor, had no effect on hyperglycemia or hepatic NDST mRNA levels, yet increased hepatic NDST protein and enzymatic activity. Similar results were obtained in diabetic animals treated with losartan, which blocks the type 1 receptor for angiotensin II (AngII). Consistent with these findings, diabetic livers exhibited increased ACE expression, and addition of AngII to cultured hepatoma cells reduced NDST activity and protein. We conclude that diabetes substantially suppresses hepatic NDST mRNA, protein, and enzymatic activity. AngII contributes to suppression of NDST protein and enzymatic activity, whereas mRNA suppression occurs independently. Suppression of hepatic NDST may contribute to diabetic dyslipidemia, and stimulation of NDST activity by AngII inhibitors may provide cardiovascular protection.