OBJECTIVE: Many of the effects of angiotensin (Ang) II are mediated through specific plasma membrane receptors. However, Ang II also elicits biological effects from the interior of the cell (intracrine), some of which are not inhibited by Ang receptor blockers (ARBs). Recent in vitro studies have identified high glucose as a potent stimulus for the intracellular synthesis of Ang II, the production of which is mainly chymase dependent. In the present study, we determined whether hyperglycemia activates the cardiac intracellular renin-Ang system (RAS) in vivo and whether ARBs, ACE, or renin inhibitors block synthesis and effects of intracellular Ang II (iAng II). RESEARCH DESIGN AND METHODS: Diabetes was induced in adult male rats by streptozotocin. Diabetic rats were treated with insulin, candesartan (ARB), benazepril (ACE inhibitor), or aliskiren (renin inhibitor). RESULTS: One week of diabetes significantly increased iAng II levels in cardiac myocytes, which were not normalized by candesartan, suggesting that Ang II was synthesized intracellularly, not internalized through AT(1) receptor. Increased intracellular levels of Ang II, angiotensinogen, and renin were observed by confocal microscopy. iAng II synthesis was blocked by aliskiren but not by benazepril. Diabetes-induced superoxide production and cardiac fibrosis were partially inhibited by candesartan and benazepril, whereas aliskiren produced complete inhibition. Myocyte apoptosis was partially inhibited by all three agents. CONCLUSIONS: Diabetes activates the cardiac intracellular RAS, which increases oxidative stress and cardiac fibrosis. Renin inhibition has a more pronounced effect than ARBs and ACE inhibitors on these diabetes complications and may be clinically more efficacious.