Several clinical trials have consistently shown that antihypertensive treatment, particularly with angiotensin-converting enzyme inhibitors (ACE-I) reduces albuminuria in Type 1 diabetic patients. More recently, data on the beneficial effects of ACE-I on the preservation of glomerular filtration rate and renal ultrastructure have emerged. However, in general, these trials have recruited a wide spectrum of diabetics, including some patients with severe albuminuria. Thus, the question of the ideal stage at which to instigate what is likely to be lifelong therapy in young people still remains unanswered. Exercise is known to significantly increase both blood pressure (BP) and urinary albumin excretion (UAE), both of which are important determinants of progression of nephropathy in diabetes. Thus, it is possible that exercise may have an adverse effect on diabetic renal disease. The effects of ACE-I on exercise-BP and exercise-UAE in microalbuminuric Type 1 diabetic patients has not been examined in long-term placebo-controlled studies. In the second part of this two-part review, we examine the effects of the ACE-I, lisinopril, 20 mg o.d. for two years, in comparison with placebo, on UAE, 24-hour ambulatory BP, exercise-BP, exercise-UAE and renal haemodynamics in 22 patients with Type 1 diabetes and low-grade microalbuminuria. We further discuss the effects of ACE-I on nephropathy and other complications of diabetes.