We utilized data from patients with stable coronary artery disease (CAD) to assess the risk of new onset diabetes (NOD) with beta-blockers, and to determine whether angiotensin converting enzyme (ACE) inhibition would modify this risk. The Prevention of Events with Angiotensin Converting Enzyme Inhibition (PEACE) trial randomized 8290 patients with stable CAD to trandolapril or placebo. The presence of NOD was assessed at each study visit over a median follow-up time of 4.8 years. We examined the risk of NOD associated with beta-blockers use with Cox regression models, adjusting for 25 baseline covariates, and tested whether this risk was modified by randomization to the ACE inhibitor. Of 6910 patients without diabetes mellitus at enrollment (1179 females/5731 males, mean age 64 ± 8 years), 4147 (60%) were taking beta blockers, and 733 (8.8%) developed NOD. We observed a significant interaction between beta-blocker use and randomization to ACE inhibitor with respect to new onset diabetes (p = 0.028). Participants taking beta-blockers assigned to the placebo group (N=2090) were at increased risk for NOD adjusting for baseline covariates (HR 1.63, 95% confidence interval 1.29, 2.05, p<0.001, while this risk was attenuated in those assigned to trandolapril (N=2057) (HR 1.11, 95% confidence interval 0.87, 1.42; p=0.39). Beta blocker use was associated with increased risk for NOD in patients with stable CAD, and this risk was reduced in patients treated concurrently with an ACE inhibitor. In conclusion, these data suggest that ACE inhibition may attenuate the risk for glucose abnormalities observed in patients taking beta blockers.