To determine the location and activity of renin-angiotensin system (RAS) components in the developing rat retina and whether the RAS influences retinal vascularization. Transgenic Ren-2 rats, which overexpress the RAS, and Sprague-Dawley (SD) rats were studied at postnatal day (P)1, P7, P14, P21, and P90. Immunohistochemistry was performed for angiotensinogen, prorenin, angiotensin II (Ang II), and the angiotensin type 1 (AT(1)) and 2 (AT(2)) receptors. Retinal active renin and prorenin were measured by radioimmunoassay, and the density of angiotensin-converting enzyme (ACE) by autoradiography. At P1 to P7, Ren-2 and SD rats were administered either the ACE inhibitor lisinopril (10 mg/kg per day, intraperitoneally [IP]) or the AT(1) receptor antagonist losartan (10 mg/kg per day, IP), and vessel length and density were measured. At all time points, RAS components were localized to blood vessels and cells in the ganglion cell layer. At P1, Ang II and both the AT(1) and AT(2) receptors were on hyaloid vessels. ACE binding increased in intensity from P1 to P90. Retinal renin was mainly activated and was 5- to 15-fold higher in Ren-2 than in SD rats. In Ren-2 rats, the growing vasculature extended farther into the retinal periphery than in SD rats and was unchanged with either lisinopril or losartan. Vascular density was increased in the periphery of Ren-2 rats compared with SD rats and was reduced with lisinopril but not with losartan. In the developing rat retina, a complete RAS is mainly found in blood vessels and cells in the ganglion cell layer, where it may influence the early stages of vascularization.