Background. We have previously reported that severe glomerulosclerosis progressively develops in the streptozotocin (STZ) diabetic transgenic (mRen‐2)27 rat. In this diabetic model, monotherapy with either angiotensin converting enzyme inhibition (ACEI) or angiotensin type 1 (AT1) receptor blockade is largely renoprotective. The objective of the present study was to determine if a combination therapy at lower doses than monotherapy would confer greater renoprotection. Methods. At 6 weeks of age, non‐diabetic control and STZ diabetic female heterozygous Ren‐2 rats were randomized to receive vehicle, the AT1 receptor blocker valsartan (V, 20 mg/kg/day), the ACEI perindopril (P, 6 mg/kg/day), or a combination of low‐dose V+P (V, 3 mg/kg/day plus P, 0.5 mg/kg/day) for 12 weeks. Results. Systolic blood pressure was lowered with all treatments, but the greatest reductions were observed with V monotherapy and combination V+P therapy. All treatments reduced albuminuria, the decline in glomerular filtration rate, and cortical collagen staining, to the same extent. The glomerulosclerotic index was increased with diabetes and reduced with V and P monotherapy. However, the low‐dose combination therapy was more effective than single therapy and reduced severe glomerulosclerosis to levels observed in non‐diabetic controls. Conclusions. Monotherapy with either V or P reduced blood pressure and retarded the decline in renal function and glomerulosclerosis in the diabetic Ren‐2 rat. Combination therapy has the additional benefit of requiring only low doses of AT1 receptor blockade and ACEI to achieve superior renoprotective effects in this diabetic nephropathy model.