1. There is continuing uncertainty about the tissue compartments where angiotensin and bradykinin peptide formation occurs. Mice with angiotensin-converting enzyme (ACE) expression targeted to the cardiomyocyte membrane provide a unique experimental model to detect ACE substrates in the extravascular compartment of the heart in vivo. 2. Angiotensin (Ang) I and II, bradykinin-(1-7) and bradykinin-(1-9) were measured in blood and cardiac ventricles of wild-type (WT) mice, mice with a non-functional somatic ACE gene promoter (KO), mice homozygous (8/8) and heterozygous (1/8) for cardiomyocyte-targeted ACE expression and a non-functional somatic ACE gene promoter, and mice heterozygous for cardiomyocyte-targeted ACE expression and heterozygous for the WT ACE allele (WT/8). 3. Cardiac AngII levels of 8/8, 1/8, WT/8 and WT mice were higher than KO levels. Cardiac AngII levels in 8/8 and 1/8 mice were also higher than WT levels, but the levels in WT/8 mice were similar to WT levels. Cardiac bradykinin-(1-9) levels of WT, but not 8/8 mice, were lower than in KO mice, whereas bradykinin-(1-7) levels in 8/8 mice were lower than in KO mice. 4. We conclude that AngI and bradykinin-(1-7) are present in the cardiac extravascular compartment of mice lacking vascular ACE and that extravascular ACE produces AngII and metabolises bradykinin-(1-7) in this compartment. The data suggest that the vascular compartment is the main site of AngI and bradykinin-(1-9) formation and metabolism and that vascular ACE may limit AngI entry to the extravascular compartment of WT mice.