Morbidity and mortality of diabetes mellitus are strongly associated with cardiovascular disease including nephropathy. A discordant tissue renin-angiotensin system (RAS) might be a mediator of the endothelial dysfunction leading to both micro- and macrovascular complications of diabetes. The elevated plasma levels of prorenin in diabetic subjects with microvascular complications might be part of this discordant RAS, especially since the plasma renin levels in diabetes are low. Prorenin, previously thought of as an inactive precursor of renin, is now known to bind to a (pro)renin receptor, thus activating locally angiotensin-dependent and -independent pathways. In particular, the stimulation of the transforming growth factor-beta (TGF-beta) system by prorenin could be an important contributor to diabetic disease complications. This review discusses the concept of the prorenin-(pro)renin receptor-TGF-beta(1) axis, concluding that interference with this pathway might be a next logical step in the search for new therapeutic regimens to reduce diabetes-related morbidity and mortality.