Epigenetic mechanisms such as chromatin histone H3 lysine methylation and acetylation have been implicated in diabetic vascular complications. However, histone modification profiles at pathologic genes associated with diabetic nephropathy in vivo and their regulation by the angiotensin II type 1 receptor (AT1R) are not clear. Here we tested whether treatment of type 2 diabetic db/db mice with the AT1R blocker losartan not only ameliorates diabetic nephropathy, but also reverses epigenetic changes. As expected, the db/db mice had increased blood pressure, mesangial hypertrophy, proteinuria, and glomerular expression of RAGE and PAI-1 vs. control db/+ mice. This was associated with increased RNA polymerase II recruitment and permissive histone marks as well as decreased repressive histone marks at these genes, and altered expression of relevant histone modification enzymes. Increased MCP-1 mRNA levels were not associated with such epigenetic changes, suggesting post-transcriptional regulation. Losartan attenuated key parameters of diabetic nephropathy and gene expression, and reversed some but not all the epigenetic changes in db/db mice. Losartan also attenuated increased H3K9/14Ac at RAGE, PAI-1, and MCP-1 promoters in mesangial cells cultured under diabetic conditions. Our results provide novel information about the chromatin state at key pathologic genes in vivo in diabetic nephropathy mediated in part by AT1R. Thus, combination therapies targeting epigenetic regulators and AT1R could be evaluated for more effective treatment of diabetic nephropathy.