The peptide hormone angiotensin (A)-II, the major effector peptide of the renin-angiotensin system (RAS), is well established to play a pivotal role in the systemic regulation of blood pressure, fluid, and electrolyte homeostasis. Recent biochemical and neurophysiologic studies have documented local intrinsic angiotensin-generating systems in organs and tissues such as the brain, retina, bone marrow, liver, and pancreas. The locally generated angiotensin peptides have multiple and novel actions including stimulating cell growth and anti-proliferative and/or antiapoptotic actions. In the mammalian brain, all components of the RAS are present including angiotensin receptor subtypes 1 (AT(1)) and 2 (AT(2)). A-II exerts most of its well defined physiologic and pathophysiologic actions, including those on the central and peripheral nervous system, through its AT(1) receptor subtype. While the AT(1) receptor is responsible for the classical effects of A-II, it has been found that the AT(2) receptor is linked to totally different signalling mechanisms and this has revealed hitherto unknown functions of A-II. AT(2) receptors are expressed at low density in many healthy adult tissues, but are upregulated in a variety of human diseases. This receptor not only contributes to stroke-related pathologic mechanisms (e.g. hypertension, atherothrombosis, and cardiac hypertrophy) but may also be involved in post-ischemic damage to the brain. It has been reported that the AT(2) receptor regulates several functions of nerve cells, e.g. ionic fluxes, cell differentiation, and neuronal tissue regeneration, and also modulates programmed cell death. In this article, we review the experimental evidence supporting the notion that blockade of brain AT(1) receptors can be beneficial with respect to stroke incidence and outcome. We further delineate how AT(2) receptors could be involved in neuronal regeneration following brain injury such as stroke or CNS trauma. The current review is focussed on some of the new functions arising from the locally formed A-II with particular attention to its emerging neuroprotective role in the brain.