The degradation of angiotensin (Ang) II by angiotensin converting enzyme 2 (ACE2), leading to the formation of Ang 1-7, is an important step in the regulation of the renin-angiotensin-aldosterone system (RAAS), and one which is significantly altered in the diabetic kidney. This study examines the role of ACE2 in hyperfiltration associated with diabetes. Streptozotocin diabetes was induced in male c57bl6 mice and ACE2 KO mice. C57bl6 mice were further randomised to receive the selective ACE2 inhibitor, MLN-4760. After two weeks of study, animals were subjected to micropuncture studies. Renal reserve was further assessed in c57bl6 mice and ACE2 KO mice following exposure to a high protein diet. The induction of diabetes in wild-type mice was associated with increased renal ACE2 activity, hyperfiltration and renal hypertrophy. On micropuncture, diabetes was associated with increased tubular free-flow and stop-flow pressure, enhanced TGF reactivity and an increased maximal response indicative of increased glomerular hydrostatic capillary pressure. Each of these increases were prevented in diabetic ACE2 KO mice and diabetic mice treated with a selective ACE2 inhibitor for seven days. ACE2 KO mice also failed to increase their creatinine clearance in response to a high protein diet. Our studies suggest that ACE2 plays a key role in the recruitment of renal reserve and hyperfiltration associated with diabetes.