Angiotensin (Ang) II is generated within the kidney via a complex transcellular pathway. Renin release is not the sole determinant of Ang II levels; the expression of angiotensinogen, Ang-converting enzyme, and angiotensinases may also regulate local Ang II. The Ang II levels in some intrarenal compartments are several orders of magnitude higher than in plasma; plasma measurements may not always predict local Ang II levels. Besides its effects on systemic blood pressure, Ang II modulates glomerular hemodynamics by constricting preferentially the efferent arteriole. The evidence available indicates that both the hemodynamic and nonhemodynamic effects of Ang II are mediated by the type 1 Ang II receptor. Nonhemodynamic effects of Ang II include stimulation of the growth of renal vascular and glomerular cells, increased synthesis of matrix molecules, and possibly a stimulation of monocyte/macrophage infiltration. These effects of the octapeptide may contribute to glomerular sclerosis and interstitial fibrosis. Intervention studies have shown that blockade of Ang II formation by Ang-converting enzyme inhibition reduces proteinuria and delays the progression of renal insufficiency in patients with diabetic and nondiabetic glomerular diseases.