Aims/hypothesis. Aldosterone blockade has followed in the footsteps of ACE inhibition in reducing mortality in patients with heart failure. This is associated with its beneficial effects on endothelial function and heart rate variability. Diabetes is another area, where angiotensin II withdrawal has proven to be of particular value. We postulated that aldosterone blockade with spironolactone might also have beneficial effects on the prognostic markers of endothelial function and heart rate variability in diabetic patients. Methods. We assessed endothelial function by forearm venous occlusion plethysmography in 42 patients with Type 2 diabetes mellitus after 1 month of treatment with spironolactone or placebo allocated in a randomised double-blind trial. Of the 42 patients, 20 were on ACE inhibitor therapy. We also assessed heart rate variability, HbA 1 c and plasma angiotensin II levels at the end of each treatment period. Results. Compared to placebo, spironolactone decreased forearm blood flow response to acetylcholine by 44.56±14.56% (p=0.003) in the group as a whole and by 57.61±15.56% (p<0.001) in the 20 patients on ACE inhibition. Spironolactone also worsened heart rate variability parameters, with root mean squared standard deviation decreased by 1.99±0.93 ms (p=0.03), low-frequency normalised power increased by 2.00±0.91 normalised units (nu) (p=0.03), high-frequency normalised power decreased by 1.98±0.94 nu (p=0.04) and the low frequency : high frequency ratio increased by 0.40±0.19 (p=0.04). HbA 1 c and angiotensin II increased during treatment with spironolactone by 0.26±0.07% (p=0.001) and 8.12±1.94 pg/ml (p=0.001) respectively. Conclusions/interpretation. Spironolactone worsened endothelial function and heart rate variability in patients with Type 2 diabetes. These findings are possibly due to the worsening of glycaemic control and increase in plasma angiotensin II that were seen with spironolactone treatment. Thus the prescription of spironolactone to diabetic patients without heart failure does not seem to be justified.