Immunohistochemical studies and experiments with microdissected nephron segments indicate that the angiotensin I converting enzyme (ACE) in the kidney is expressed in the vascular endothelial cells of the renal vessels and in the epithelial cells of the proximal convoluted tubule and the pars recta. Angiotensin converting enzyme is a membrane-bound zinc metallopeptidase and the primary structure has recently been determined by protein sequencing and molecular cloning. It is probably anchored to the cell membrane by a single, short, transmembrane domain located near the carboxy-terminal extremity. The larger, externally situated, amino-terminal part of the molecule is organized in two large, highly homologous domains, each with a putative active site. The function of the endothelial enzyme in the renal vessels is primarily related to angiotensin II (Ang II) formation. However, its level of expression in renal vessels, especially at the glomerular level, appears to be very low in the adult human kidney, and there is evidence that the conversion of angiotensin I (Ang I) may be a rate-limiting step in Ang II formation in the kidney. The vascular enzyme may also contribute to the inactivation of kinins in the peritubular circulation.