Diabetes is among the most common causes of end-stage renal disease, although its pathophysiology is incompletely understood. We performed next-generation sequencing-based transcriptome analysis of renal gene expression changes in the OVE26 murine model of diabetes (age 15 weeks), relative to non-diabetic control, in the presence and absence of short-term (seven-day) treatment with the angiotensin receptor blocker, losartan (n = 3-6 biological replicates per condition). We detected 1438 statistically significant changes in gene expression across conditions. Of the 638 genes dysregulated in diabetes relative to the non-diabetic state, >70% were downregulation events. Unbiased functional annotation of genes up- and down-regulated by diabetes strongly associated (p>1×10-8) with terms for oxidative stress and for endoplasmic reticulum stress/protein folding. Most of the individual gene products up- or down-regulated with diabetes were unaffected by losartan treatment; however, of the gene products dysregulated in diabetes and influenced by losartan treatment, the vast majority of changes were in the direction of amelioration rather than exacerbation of the diabetic dysregulation. This group of losartan-protected genes associated strongly with annotation terms for endoplasmic reticulum stress, heat shock proteins, and chaperone function, but not oxidative stress; therefore, the losartan-unaffected genes suggest avenues for additional therapeutic opportunity in diabetes. Interestingly, the gene product most highly upregulated by diabetes (>52-fold), encoded by the cationic amino acid transporter Slc7a12, and the gene product most highly downregulated by diabetes (>99%) - encoded by the "pseudogene" Gm6300 - are adjacent in the murine genome, are members of the SLC7 gene family, and are likely paralogous. Therefore, diabetes activates a near-total genetic switch between these two paralogs. Other individual-level changes in gene expression are potentially relevant to diabetic pathophysiology, and novel pathways are suggested. Genes unaffected by diabetes alone but exhibiting increased renal expression with losartan produced a signature consistent with malignant potential.