Inclusion Criteria:

• Diabetes diagnosed after the age of 30
• Insulin not required within 6 months of first being diagnosed with Non-insulin Dependent Diabetes Mellitus
• No history of diabetic ketoacidosis
• Patients may be currently treated with diet, oral hypoglycemics or insulin
• Patients must have proteinuria defined as: Urine protein >1+ on dipstick at the initial screening visit
• Patients with hypertension (high blood pressure) must have a sitting blood pressure >200/110 mm Hg at Visit 1

Exclusion Criteria:

• Patients with insulin-dependent diabetes mellitus (juvenile onset)
• Patients treated with an ACE inhibitor or angiotensin II antagonist (AIIA) for >5 years
• Patients treated with ACE inhibitor or AIIA therapy for 5 years or less may enter the study provided therapy is discontinued during the 6 week screening period prior to randomization
• History of myocardial infarction (MI) (heart attack) or coronary artery bypass graft (CABG) surgery within the past 1 month
• History of cerebral vascular accident (CVA) (stroke) or percutaneous transluminal coronary angioplasty (PTCA) within the past 6 months
• History of transient ischemic attacks (TIA) within the past year. Patients with unstable angina are excluded until stabilized
• Heart failure requiring ACE inhibitor therapy
• Steroids (oral or parenteral) or immunosuppressives are not permitted. Debilitating psychological illness
• Evidence of significant hepatic (liver) dysfunction: History of allergy to losartan
• Known positive test for HIV or patients known to be hepatitis B or C antigen carriers
• Pregnant or nursing women
• Females of childbearing age must either be surgically sterilized or, if sexually active, using an effective form of contraception and may enter only if an exclusionary pregnancy test is done within approximately 72 hours prior to randomization
• Pregnancy tests will be done every 3 months during the study and at the time of discontinuation