The carboxypeptidase ACE2 is a homologue of angiotensin-converting enzyme (ACE). To clarify the physiological roles of ACE2, we generated mice with targeted disruption of the Ace2 gene. ACE2-deficient mice were viable, fertile, and lacked any gross structural abnormalities. We found normal cardiac dimensions and function in ACE2-deficient animals with mixed or inbred genetic backgrounds. On the C57BL/6 background, ACE2 deficiency was associated with a modest increase in blood pressure, whereas the absence of ACE2 had no effect on baseline blood pressures in 129/SvEv mice. After acute Ang II infusion, plasma concentrations of Ang II increased almost 3-fold higher in ACE2-deficient mice than in controls. In a model of Ang II–dependent hypertension, blood pressures were substantially higher in the ACE2-deficient mice than in WT. Severe hypertension in ACE2-deficient mice was associated with exaggerated accumulation of Ang II in the kidney, as determined by MALDI-TOF mass spectrometry. Although the absence of functional ACE2 causes enhanced susceptibility to Ang II–induced hypertension, we found no evidence for a role of ACE2 in the regulation of cardiac structure or function. Our data suggest that ACE2 is a functional component of the renin-angiotensin system, metabolizing Ang II and thereby contributing to regulation of blood pressure.