--- - |2+ Key points Increased activation of the renin‐angiotensin‐aldosterone system (RAAS) and elevated growth factor production are of crucial importance in the development of renal fibrosis leading to diabetic kidney disease. The aim of this study was to provide evidence for the antifibrotic potential of RAAS inhibitor (RAASi) treatment and to explore the exact mechanism of this protective effect. We found that RAASi ameliorate diabetes‐induced renal interstitial fibrosis and decrease profibrotic growth factor production. RAASi prevents fibrosis by acting directly on proximal tubular cells, and inhibits hyperglycaemia‐induced growth factor production and thereby fibroblast activation. These results suggest a novel therapeutic indication and potential of RAASi in the treatment of renal fibrosis. Abstract In diabetic kidney disease (DKD) increased activation of renin‐angiotensin‐aldosterone system (RAAS) contributes to renal fibrosis. Although RAAS inhibitors (RAASi) are the gold standard therapy in DKD, the mechanism of their antifibrotic effect is not yet clarified. Here we tested the antifibrotic and renoprotective action of RAASi in a rat model of streptozotocin‐induced DKD. In vitro studies on proximal tubular cells and renal fibroblasts were also performed to further clarify the signal transduction pathways that are directly altered by hyperglycaemia. After 5 weeks of diabetes, male Wistar rats were treated for two more weeks per os with the RAASi ramipril, losartan, spironolactone or eplerenone. Proximal tubular cells were cultured in normal or high glucose (HG) medium and treated with RAASi. Platelet‐derived growth factor (PDGF) or connective tissue growth factor (CTGF/CCN2)‐induced renal fibroblasts were also treated with various RAASi. In diabetic rats, reduced renal function and interstitial fibrosis were ameliorated and elevated renal profibrotic factors (TGFβ1, PDGF, CTGF/CCN2, MMP2, TIMP1) and alpha‐smooth muscle actin (αSMA) levels were decreased by RAASi. HG increased growth factor production of HK‐2 cells, which in turn induced activation and αSMA production of fibroblasts. RAASi decreased tubular PDGF and CTGF expression and reduced production of extracellular matrix (ECM) components in fibroblasts. In proximal tubular cells, hyperglycaemia‐induced growth factor production increased renal fibroblast transformation, contributing to the development of fibrosis. RAASi, even in non‐antihypertensive doses, decreased the production of profibrotic factors and directly prevented fibroblast activation. All these findings suggest a novel therapeutic role for RAASi in the treatment of renal fibrosis. - 'The Journal of Physiology, EarlyView. '