Introduction: Previous studies demonstrated that stimulation of angiotensin subtype 1 receptor (AT(1)R) led to increased renal generation of prostaglandins E-2 (PGE(2)) and renal inflammation. In turn, PGE(2) increases AT(1)R activity. The conversion of PGE(2) to the less active metabolite prostaglandin F-2 (PGF(2)) via 9-ketoreductase interrupts this feedback loop. The effects of diabetes on the interface between AT(1)R, PGE(2) and PGF(2) are not well established. We hypothesized that in diabetes, an aberrant AT(1)R activity enhances the biosynthesis of PGE(2) and impairs the activity of PGE 9-ketoreductase, leading to accumulation of PGE(2). Materials and methods: Using microdialysis technique, we monitored renal interstitial fluid levels of angiotensin II (Ang II), PGE(2) and PGF(2) in control and AT(1)R blocker, valsartan, treated diabetic rats (N=8 each). We utilized the PGF(2) to PGE(2) ratio as indirect measure of PGE 9-ketoreductase activity. Results: Diabetes increased renal interstitial fluid levels of Ang II, PGE(2) and PGF(2). PGF(2)/PGE(2) ratio increased by the third week, but declined by the sixth week of diabetes. Valsartan reduced PGE(2) and PGF(2) levels and increased Ang II and the conversion of PGE(2) to PGF(2). Conclusion: Our results suggest that in diabetes, AT(1)R increases PGE(2) generation and reduces conversion of PGE(2) to PGF(2) with the progression of diabetes.