We identified an angiotensin-generating system in pancreatic islets and found that exogenously administered angiotensin II, after binding to its receptors (angiotensin II type 1 receptor [AT1R]), inhibits insulin release in a manner associated with decreased islet blood flow and (pro)insulin biosynthesis. The present study tested the hypothesis that there is a change in AT1R expression in the pancreatic islets of the obesity-induced type 2 diabetes model, the db/db mouse, which enables endogenous levels of angiotensin II to impair islet function. Islets from 10-week-old db/db and control mice were isolated and investigated. In addition, the AT1R antagonist losartan was administered orally to 4-week-old db/db mice for an 8-week period. We found that AT1R mRNA was upregulated markedly in db/db islets and double immunolabeling confirmed that the AT1R was localized to beta-cells. Losartan selectively improved glucose-induced insulin release and (pro)insulin biosynthesis in db/db islets. Oral losartan treatment delayed the onset of diabetes, and reduced hyperglycemia and glucose intolerance in db/db mice, but did not affect the insulin sensitivity of peripheral tissues. The present findings indicate that AT1R antagonism improves beta-cell function and glucose tolerance in young type 2 diabetic mice. Whether islet AT1R activation plays a role in the pathogenesis of human type 2 diabetes remains to be determined.