Diabetes is the leading cause of end-stage renal disease (ESRD) in the United States. The overall rate of ESRD secondary to diabetes has risen 68% since 1992. Medications that block the renin angiotensin system have been shown to decrease the progression of diabetic nephropathy. The use of an angiotensin receptor blocker (ARB) has been shown to decrease the risk of progression of kidney disease in two studies of individuals with Type 2 diabetes and proteinuria. Despite the use of an ARB, the incidence of renal failure remained high in the treated group in both studies. The combination of an angiotensin converting enzyme inhibitor (ACEI) and ARB can lead to more complete blockade of the renin angiotensin system. In diabetic kidney disease, combination therapy has been shown to decrease proteinuria in short-term studies. Although there are encouraging results for improvement in proteinuria there are no data on progression of kidney disease for the use of combination of ACEI and ARB therapy in patients with diabetes. In addition, there could be an increased risk of serious hyperkalemia in individuals with diabetes who receive combination ACEI and ARB. The investigators therefore propose a randomized double blind multi-center clinical trial to assess the effect of combination of ACEI and ARB in patients with diabetes and proteinuria on progression of kidney disease.