Transforming growth factor-β (TGF-β) and the renin-angiotensin system (RAS) have both been implicated in the pathogenesis of glomerulosclerosis in diabetic kidney disease. However, tubulointerstitial pathology may also be an important determinant of progressive renal dysfunction in diabetic nephropathy. In the present study, we investigated tubulointerstitial injury, TGF-β1 expression, and the effect of blocking the RAS by inhibition of ACE. We randomized 36 male SD rats to control and diabetic groups. Diabetes was induced in 24 rats by administration of streptozotocin; 12 diabetic rats were further randomized to receive the ACE inhibitor ramipril (3 mg/l drinking water). At 6 months, experimental diabetes was associated with tubulointerstitial damage, a 70% increase in expression of TGF-β1 (P < 0.05 vs. control), and a 120% increase in α1 (IV) collagen gene expression (P < 0.01 vs. control). In situ hybridization demonstrated a diffuse increase in both TGF-β1 and αl (IV) collagen mRNA in renal tubules. In addition, intense expression of both transcripts was noted in regions of focal tubular dilatation. Administration of the ACE inhibitor ramipril prevented tubulointerstitial injury and the overexpression of TGF-β1 and α1 (IV) collagen mRNA. Changes in gene expression were accompanied by parallel changes in immunostaining for TGF-β1 and type IV collagen. The observed beneficial effects of ramipril on the tubulointerstitium in experimental diabetes suggest that this mechanism may contribute to the therapeutic effect of ACE inhibitors in diabetic nephropathy.