OBJECTIVES To examine the association of Angiotensin Converting Enzyme inhibitors (ACEI) and Angiotensin Receptor Blockers (ARBs) with Diabetes Nephropathy or Chronic Renal Failure (DN/CRF), in patients with age 65 years or more with diabetes mellitus. METHODS The study was a retrospective cohort study on elderly diabetic patients in the Veteran Affairs (VA). Exposure to ACEI and ARBs was observed in calendar year 2000 and outcomes (DN/CRF) were identified between January 1, 2001 and September 30, 2001. Patients who received any diagnosis of renal disease (DN/CRF) before 2001 and were on both ACEI and ARB were excluded. A Cox proportional hazards model was employed to examine the association between time to DN/CRF diagnosis and exposure to ACEI or ARB. The confounders adjusted in the model included patient socio-demographics, co-morbidities, and co-medications. RESULTS The final cohort consisted of 427,124 patients with a mean age of 76 years. Majority of the patients were males (97.76%), whites (83.83%), in the age group of 76 to 85 years (48.32%). Cardiovascular comorbidities were common, with almost 80% of patients having hypertension, ischemic heart disease (IHD; 34%), and Chronic Heart Failure (CHF; 26%). A total of 2.76% of the patients from the final cohort developed DN/CRF. Multivariable analysis revealed that exposure to ACEI and ARBs is associated with increased risk of DN/CRF by 42% (95% CI 1.354-1.481) and 51% (95% CI 1.37-1.656) respectively. Many co-morbid conditions (Hypertension, IHD, CHF) and all the co-medications adjusted in the model were significantly associated with increased risk of DN/CRF, with most prominent association found in patients using insulin, antihypertensives, and diuretics. CONCLUSIONS Our study indicates that the use of agents that inhibit Renin-Angiotensin-Aldosterone System (RAAS) do not prevent the development of DN/CRF. Results must be interpreted with caution, and further studies are needed to carefully address limitations and improve upon these initial results.