PURPOSE: An active renin-angiotensin system has been found in the retina of rats and humans. Angiotensin-converting enzyme 2 (ACE2) is a recently discovered enzymatic homologue of Angiotensin-converting enzyme (ACE) that may be an important new component of the renin-angiotensin system (RAS). This study assesses the involvement of ACE2 in the normal and diabetic rodent retina and its modulation by ACE inhibition. METHODS: Sprague-Dawley rats were randomised into three groups, control, diabetes, and diabetes plus ramipril, with diabetes induced with the cell toxin streptozocin and the study run for 24 weeks. ACE2 and ACE gene levels were measured using quantitative real-time polymerase chain reaction (QRT-PCR), ACE2 protein expression was confirmed by Western blotting, and ACE and ACE2 catalytic activity were measured using specific activity assays in the rat retina. Localisation of ACE2 mRNA and protein were determined by in situ hybridisation and immunohistochemistry, respectively. RESULTS: ACE mRNA levels were decreased to approximately 50 in the diabetic retina, but ACE2 mRNA levels were not significantly changed. ACE but not ACE2 gene expression was influenced by ramipril treatment. Following immunostaining, both ACE2 and ACE protein were localised predominantly to the inner nuclear layer (INL) but also to photoreceptors. In the diabetic retina, ACE enzyme activity was decreased, whereas ACE2 enzyme activity was increased. CONCLUSIONS: This study has identified ACE2 gene and catalytically active protein in the rodent retina. In diabetes, the major changes were a decrease in ACE but an increase in ACE2 enzymatic activity. The ACE inhibitor ramipril did not reduce ACE2 enzymatic activity.