Oncogenic K-Ras (K-RasG12V) promotes senescence in normal cells but fuels transformation of cancer cells after the senescence barrier is bypassed. The mechanisms regulating this pleiotropic function of K-Ras remain to be fully established and bear high pathological significance. We find that K-RasG12V activates the angiotensinogen (AGT) gene promoter and promotes AGT protein expression in a Kruppel-like factor 6–dependent manner in normal cells. We show that AGT is then converted to angiotensin II (Ang II) in a cell-autonomous manner by cellular proteases. We show that blockade of the Ang II receptor type 1 (AT1-R) in normal cells inhibits oncogene-induced senescence. We provide evidence that the oncogenic K-Ras–induced synthesis of Ang II and AT1-R activation promote senescence through caveolin-1–dependent and nicotinamide adenine dinucleotide phosphate oxidase 2–mediated oxidative stress. Interestingly, we find that expression of AGT remains elevated in lung cancer cells but in a Kruppel-like factor 6–independent and high-mobility group AT-hook 1–dependent manner. We show that Ang II–mediated activation of the AT1-R promotes cell proliferation and anchorage-independent growth of lung cancer cells through a STAT3-dependent pathway. Finally, we find that expression of AGT is elevated in lung tumors of K-RasLA2-G12D mice, a mouse model of lung cancer, and human lung cancer. Treatment with the AT1-R antagonist losartan inhibits lung tumor formation in K-RasLA2-G12D mice. Together, our data provide evidence of the existence of a novel cell-autonomous and pleiotropic Ang II–dependent signaling pathway through which oncogenic K-Ras promotes oncogene-induced senescence in normal cells while fueling transformation in cancer cells.