Renin angiotensin system inhibitor therapy is seldom offered to individuals who have diabetes and advanced chronic kidney disease because of safety concerns. In this post hoc, secondary analysis of the Reduction of Endpoints in NIDDM with the Angiotensin II Antagonist Losartan (RENAAL) trial, angiotensin antagonism risk/benefit profile was assessed in 1513 individuals with type 2 diabetes and overt nephropathy. Incidence of ESRD, hospitalizations for heart failure, withdrawals for adverse events, and proteinuria during losartan or conventional treatment were compared within three tertiles of baseline serum creatinine concentration (highest, 2.1 to 3.6 mg/dl; middle, 1.6 to 2.0 mg/dl; lowest, 0.9 to 1.6 mg/dl). Losartan decreased the risk of ESRD by 24.6, 26.3, and 35.3% in highest, middle, and lowest tertiles, respectively. For every 100 patients with serum creatinine >2.0, 1.6 to 2.0, or <1.6 mg/dl, respectively, 4 yr of losartan therapy was estimated to save 18.9, 8.4, and 2.9 ESRD events and US$1,502,855, US$1,021,770, and US$528,591 costs for renal replacement therapy. Losartan also decreased the hospitalizations for heart failure by 50.2 and 45.1, in the highest and middle tertile, respectively. Withdrawals for adverse events other than heart failure were comparable between tertiles and treatment groups. Proteinuria decreased more on losartan than on placebo in all tertiles (highest, 24 versus -8%; middle, 16 versus -8%; lowest, 15 versus -10%). In proteinuric individuals with type 2 diabetes, losartan therapy reduced ESRD and hospitalizations for heart failure and was well tolerated at all levels of renal function. Angiotensin II antagonism is a suitable and well-tolerated treatment for individuals with type 2 diabetes even with GFR levels approaching renal replacement therapy.