Previous studies have shown increases in ambulatory short-term blood pressure (BP) variability to be related to cardiovascular disease. In this study, we examined whether the angiotensin II type 1 receptor blocker (ARB) would improve ambulatory short-term BP variability in hypertensive patients with diabetic nephropathy. A total of 30 patients with type II diabetes, along with hypertension and overt nephropathy, were enrolled in this randomized, two-period, crossover trial of 12 weeks of treatment with losartan (50 mg daily) and telmisartan (40 mg daily). At baseline and at the end of each treatment period, 24-h ambulatory BP monitoring with power spectral analysis of heart rate and measurements of proteinuria, estimated glomerular filtration rate and brachial-ankle pulse wave velocity (baPWV) were performed. After 12 weeks of treatment, 24-h, daytime and nighttime short-term BP variability, assessed on the basis of the coefficient of variation of ambulatory BP, was significantly decreased by telmisartan. Both losartan and telmisartan reduced urinary protein excretion and baPWV. However, compared with losartan, telmisartan significantly decreased urinary protein excretion, baPWV and low-frequency (LF)-to-high-frequency (HF) ratio, an index of sympathovagal balance. Multiple regression analysis showed significant correlations between urinary protein excretion and baPWV, 24-h LF-to-HF ratio, nighttime systolic BP and 24-h short-term systolic BP variability. These results suggest that ARB, particularly telmisartan, is effective in reducing proteinuria in hypertensive patients with overt diabetic nephropathy, partly through inhibitory effects on ambulatory short-term BP variability and sympathetic nerve activity, in addition to its longer duration of action on nighttime BP reduction.