Intrauterine growth restriction (IUGR) has been linked to the development of cardiovascular complications in the offspring. We have previously shown that in an ovine model of IUGR placental blood flow, in both umbilical and uterine artery, was decreased in diet-restricted dams. Angiotensin-converting enzyme (ACE), its metabolite Ang II and the receptor AT1 constitute the vascular-detrimental axis or renin angiotensin system, while ACE2, its metabolite Ang-(1-7) and Mas receptor constitute vasoprotective axis. This study tested the hypothesis that IUGR induces ACE2/ACE imbalance in the placental circulation. In ewe lambs, IUGR was accomplished by providing 60% of the nutrient requirement (RES) while the control group received adequate nutrients (CON) from day 50 to day 130 of gestation. At day 130, plasma samples were collected from umbilical artery (Um-A) and vein (Um-V), uterine artery (Ut-A) and vein (Ut-V), and jugular vein (J-V). ACE and ACE2 enzyme activities were determined by using enzyme-specific fluorogenic substrates, and enzyme-selective inhibitors, captopril and MLN-4760, respectively. Activities were expressed as percent inhibition by the respective inhibitors. ACE2 activity is decreased in the plasma obtained from Um-A (16±2), Um-V (29±4) and Ut-V (31±3) but not in Ut-A of RES group, compared to the CON group (Um-A 25±3, Um-V 42±2 and Ut-V 43±2, P<0.05, P<0.02 and P<.01, respectively, n=5). This resulted in decreased ACE2/ACE (CON: Um-A 0.43±0.03, Um-V 0.84±0.08 and Ut-V 0.82±0.05, and RES: Um-A 0.26±0.02, Um-V 0.46±0.05 and Ut-V 0.5±0.03, P<0.002, P<0.004, P<0.001, respectively). ACE activity was unchanged (n=5) in all four samples of placental circulation. In the J-V plasma ACE2 was decreased (24±2 vs 31±6, NS) and ACE was increased (68±4 vs 54±6, P<0.05) in RES group compared to CON (n=5). This resulted in decreased ACE2/ACE (CON: 0.58±0.04 and RES: 0.3±0.02). These observations suggest that IUGR induces ACE2/ACE imbalance. In the maternal systemic circulation it is largely due to increased ACE, while in the placental circulation it is due to decreased ACE2. Hyperactivity of ACE/Ang II/AT1 receptor pathway due attenuated opposing activity of ACE2 may restrict blood flow to the placental tissues during development.