The kidney has been traditionally considered to be one the pivotal organs involved in the systemic actions of the renin-angiotensin system (RAS) with renin produced in the juxtaglomerular apparatus and angiotensin II (ANG II) as a key player in the regulation of glomerular hemodynamics. However, many studies in the last decade, facilitated by a throughout molecular characterization of all elements of the RAS, have provided convincing evidence that the kidney exhibits a local RAS which may independently function from the systemic actions of the endocrine RAS. Moreover, even local distinct cell populations along the nephron possess all components of a functioning RAS. For example, proximal tubular cells express mRNA and protein for angiotensinogen, renin, and angiotensin converting enzyme (ACE). They bear different types of ANG II receptors with the appropriate signal transduction systems, and these cells also exhibit surface proteases like angiotensinase A which are required for the inactivation of ANG II. Moreover, recent studies in the isolated perfused kidney have clearly shown that proximal tubular cells produce considerable amounts of ANG II and these concentrations exceed approximately hundred times the systemic concentration of the peptide. Besides the well-known regulation of glomerular hemodynamics by contraction of the efferent glomerular arteriole and mesangium cells, ANG II influences transport and acidification processes in proximal and distal tubules. In addition, the octapeptide stimulates metabolic pathways like tubular gluconeogenesis and ammoniagenesis. Accumulating data over the last years derived from in vivo and in vitro studies have demonstrated that ANG II is also a growth factor for renal cells. For example, cell culture experiments have shown that the octapeptide stimulates proliferation or hypertrophy of mesangial cells. In contrast, proliferation of cultured proximal tubular cells is inhibited by ANG II and cellular hypertrophy of these cells is induced. Many studies have provided evidence that early mesangial proliferation/hypertrophy and tubular hypertrophy is a predecessor of the subsequent development of glomerulosclerosis and interstitial fibrosis, situations with irreversible morphological changes of the kidney's architecture leading finally to end-stage renal disease. Therefore, the identification of ANG II as a renal growth factor and a better understanding of its local intrarenal synthesis and growth stimulating effects on different cell types along the nephron may help to develop rational therapeutic interventions to prevent the progression of renal disease.