Background/Aims: Increased oxidative stress is involved in the aetiology of diabetic nephropathy, and angiotensin II is reported to play a considerable role in the development of renal damage in diabetic kidney. Angiotensin antagonism can slow the progression of renal impairment in diabetes. The present study was thus designed to examine the effect of an angiotensin II type 1 (AT<sub>1</sub>) receptor antagonist, irbesartan on renal function, oxidative stress and nitric oxide (NO) release in streptozotocin (STZ)-induced diabetic rats. Methods: Diabetes was induced by a single intraperitoneal injection of streptozotocin (65 mg/kg) in rats. After 4 weeks of STZ injection, rats were divided into four groups: the control rats, diabetic rats and diabetic rats treated with irbesartan (25 and 50 mg/kg, orally) respectively till 8 weeks starting from 4 weeks after STZ injection. Renal function was assessed by creatinine, blood urea nitrogen, creatinine clearance and urea clearance. Oxidative stress was measured by renal malondialdehyde (MDA), reduced glutathione (GSH), superoxide dismutase (SOD) and catalase. We also measured renal nitrite levels. Results: At the end of the 8th week, diabetic rats exhibited renal dysfunction as evidenced by reduced creatinine and urea clearance along with enhanced albumin excretion rate as compared with control rats. Biochemical analysis of kidneys revealed a marked increase in oxidative stress demonstrated by increased lipid peroxidation and decreased activities of key antioxidant enzymes, GSH, SOD and catalase in diabetic rats. NO release was also significantly higher in diabetic rats than controls. Chronic treatment with irbesartan in diabetic rats significantly attenuated both renal dysfunction and oxidative stress along with increased NO levels as compared with untreated diabetic rats. The kidneys of diabetic rats showed morphological changes such as hyaline casts, glomerular thickening and moderate interstitial fibrosis and arteriolopathy, whereas irbesartan administration markedly prevented diabetic-induced renal morphological alterations. Conclusions: The present study suggests that oxidative stress/nitrosative stress is increased in the diabetic kidney and AT<sub>1</sub> receptor blockade can prevent these changes. The results also suggest that in STZ-induced diabetic rats, the protective action of irbesartan might be mediated, at least in part, by its effect on tissue oxidant/antioxidant status.