Diabetic retinopathy (DR) is the most common diabetic vascular complication. Despite recent advances in therapeutics and management, DR remains the leading cause of severe vision loss in people under age of sixty and there is no cure currently. Existing evidence suggests that hyperactivity of the vasoconstrictive, proliferative, pro-inflammatory, and fibrotic axis [angiotensin-converting enzyme (ACE)/angiotensin II (Ang II)/angiotensin type I receptor (AT1R)] of the renin-angiotensin system (RAS) plays a central role in the pathogenesis of DR. Diabetes induced hyperactivity of RAS contributes to development and progression of diabetic retinopathy by increasing oxidative stress, vascular inflammation and endothelial dysfunction. Nevertheless, inhibitors of this axis have not proven to be effective in the treatment and prevention of DR in several clinical trials. This is likely due to local activation of Ang II formation independent of circulating Ang II, as well as Ang II- independent activation of RAS within ocular tissue that is not affected by classic RAS inhibitors. This is supported by overwhelming evidence that all components of RAS are expressed in various cell types of the retina and the ocular Ang II levels are much higher in vitreous fluids than plasma in patients with proliferative diabetic retinopathy. The recently established vasoprotective axis involving ACE2/Ang-(1-7)/Mas counteracts the traditional proliferative, fibrotic, proinflammatory and hypertrophic effects of the ACE/Ang II/AT1R axis of the RAS. We have shown that all genes of the RAS are locally expressed; establishing the existence of an intrinsic retinal RAS; and DR is associated with impaired balance of local retinal RAS. Increased expression of ACE2/Ang-(1-7) using AAV-mediated gene delivery overcomes this imbalance and confers protection against DR; and these beneficial effects of gene transfer occur without influencing the systemic hyperglycemic status. Thus, strategies enhancing the protective ACE2/Ang-(1-7) axis of RAS could serve as a novel therapeutic target for DR.