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Many studies have emphasized the role of antihypertensive drugs and in particular angiotensin converting enzyme (ACE) inhibitors in the retardation of diabetic nephropathy. Although these studies have focused predominantly on patients with overt proteinuria, more recently a number of investigators have explored the role of ACE inhibitors in both type I and type II diabetic patients with an earlier phase of diabetic renal disease known as microalbuminuria. These agents are now being considered as renoprotective agents not only in hypertensive patients but also in those with ‘normal’ blood pressure. Initially, studies in type I diabetic patients showed that ACE inhibition was effective in retarding the increase in albuminuria which was observed in placebo treated groups. More recently, several multi-centre placebo controlled studies have been performed suggesting that prolonged treatment not only reduced albuminuria but also preserved renal function. The role of ACE inhibition in microalbuminuric type II diabetic patients is less well characterised although several studies have recently described beneficial effects of ACE inhibition on albuminuria and possibly on renal function.Although ACE inhibitors have been clearly shown to reduce urinary albumin excretion in diabetic patients, the issue as to whether they confer a specific benefit over other classes of antihypertensive agents remains controversial. Several meta-analyses have suggested that ACE inhibitors are more potent at decreasing albuminuria or proteinuria than other antihypertensive agents, for a given reduction in blood pressure. The Melbourne Diabetic Nephropathy Study Group has instituted a study which is placebo-controlled and is confined to normotensive type I and type II diabetic patients. The ACE inhibitor perindopril has been compared not only with placebo but also with the dihydropyridine calcium channel blocker, nifedipine. Preliminary analysis reveals that after 12 and 24 months of treatment, perindopril is more effective in reducing albuminuria than placebo or nifedipine.ACE inhibitors are a promising class of antihypertensive agents in diabetic patients with microalbuminuria. These drugs should be considered as first line agents in such patients, even in the absence of systemic hypertension.