Diabetic kidney disease is the leading cause of end-stage renal disease worldwide. Podocytes are highly differentiated, pericyte-like cells that are essential for normal function of the kidney filter. Loss of podocytes is a hallmark of progressive kidney diseases including diabetic nephropathy. Podocytes are a direct target for angiotensin II -mediated injury by altered expression and distribution of podocyte proteins. Additionally, angiotensin II promotes podocyte injury indirectly by increasing calcium influx and production of reactive oxygen species. Notwithstanding the convincing rationale for angiotensin II blockade as a treatment modality, the incidence of diabetes-related end stage renal disease has increased steadily despite widespread use of angiotensin converting enzyme inhibitors (ACEIs) and angiotensin receptor blockers (ARBs). Recently published clinical trials have rekindled a debate on the safety and efficacy of dual blockade of the renin-angiotensin system (RAS). This review summarizes the rationale for blockade of angiotensin II as a therapeutic target in treating diabetic kidney disease, including the critical role played by podocytes. Recent relevant clinical trials on the role of RAS blockade in the treatment of diabetic kidney disease are discussed.