The traditional linear model of the RAS has now been replaced by a dynamic system than includes a number of new components. Among them the angiotensin converting enzyme type 2 has recently become recognized as an important homeostatic factor and counterbalance to ACE, modulating the balance between vasoconstrictors and vasodilators within the heart and kidney, and playing a significant role in regulating cardiovascular and renal function. However, ACE2 also has a number of important independent actions as evidence by its differential distribution in both development and in adult tissues. Studies from knockout mice suggest that ACE2 is involved in both cardiac and renal development. ACE2 is also involved in a number of disease processes, most notably ACE2 has been reported recently to be the functional receptor for the severe acute respiratory syndrome (SARS) coronavirus. A reduction in ACE2 in diabetes may also contribute to endorgan damage. ACE2 may also have important functional consequences in heart failure and pre-eclampsia. In this context, selective inhibitors of ACE2 will provide important tools for exploring the physiology and pathology of the enzyme in both heath and disease states.