Increased generation of reactive oxygen species (ROS) leads to oxidative stress in diabetes. Catalase is a highly conserved heme-containing protein that reduces hydrogen peroxide to water and oxygen and is an important factor decreasing cellular injury owing to oxidative stress. Hyperglycemic conditions increase oxidative stress and angiotensinogen gene expression. Angiotensinogen conversion to angiotensin II leads to a furtherance in oxidative stress through increased generation of reactive oxygen species. In this study, we utilized mice transgenically overexpressing rat catalase in a kidney-specific manner to determine the impact on ROS, angiotensinogen and apoptotic gene expression in proximal tubule cells of diabetic animals. Proximal tubules isolated from wild-type and transgenic animals without or with streptozotocin-induced diabetes were incubated in low glucose media in the absence or presence of angiotensin II or in a high-glucose media. Our results show that the overexpression of catalase prevents the stimulation of ROS and angiotensinogen mRNA in tubules owing to elevated glucose or angiotensin II in vitro. Additionally, overexpression of catalase attenuated ROS generation, angiotensinogen and proapoptotic gene expression and apoptosis in the kidneys of diabetic mice in vivo. Our studies point to an important role of ROS in the pathophysiology of diabetic nephropathy.