Dysfunction of renin-angiotensin system (RAS) contributes to the pathogenesis of diabetic retinopathy (DR). Prorenin, the precursor of renin is highly elevated in ocular fluid of diabetic patients with proliferative retinopathy. Prorenin may exert local effects in the eye by binding to the so-called (pro)renin receptor ((P)RR). Here we investigated the combined effects of the renin inhibitor aliskiren and the putative (P)RR blocker handle-region peptide (HRP) on diabetic retinopathy in streptozotocin (STZ)-induced diabetic transgenic (mRen2)27 rats (a model with high plasma prorenin levels) as well as prorenin stimulated cytokine expression in cultured Müller cells. Adult (mRen2)27 rats were randomly divided into the following groups: (1) non-diabetic; (2) diabetic treated with vehicle; (3) diabetic treated with aliskiren (10 mg/kg per day); and (4) diabetic treated with aliskiren+HRP (1 mg/kg per day). Age-matched non-diabetic wildtype Sprague-Dawley rats were used as control. Drugs were administered by osmotic minipumps for three weeks. Transgenic (mRen2)27 rat retinas showed increased apoptotic cell death of both inner retinal neurons and photoreceptors, increased loss of capillaries, as well as increased expression of inflammatory cytokines. These pathological changes were further exacerbated by diabetes. Aliskiren treatment of diabetic (mRen2)27 rats prevented retinal gliosis, and reduced retinal apoptotic cell death, acellular capillaries and the expression of inflammatory cytokines. HRP on top of aliskiren did not provide additional protection. In cultured Müller cells, prorenin significantly increased the expression levels of IL-1α and TNF-α, and this was completely blocked by aliskiren or HRP, their combination, (P)RR siRNA and the AT1R blocker losartan, suggesting that these effects entirely depended on Ang II generation by (P)RR-bound prorenin. In conclusion, the lack of effect of HRP on top of aliskiren, and the Ang II-dependency of the ocular effects of prorenin in vitro, argue against the combined application of (P)RR blockade and renin inhibition in diabetic retinopathy.