Diabetic patients are at an increased risk of cardiovascular disease, in part due to inflammation and oxidative stress. These two pathological mechanisms also affect other organs and cells including the kidneys and progenitor cells. Angiotensin-(1-7) [Ang-(1-7)] has previously been shown to counterbalance pathological effects of angiotensin II, including inflammation and oxidative stress. The aim of this study was to investigate the effects of short-term (2 weeks) Ang-(1-7) treatment on cardiovascular and renal function in a mouse model of type 2 diabetes (db/db). Eight- to nine-week-old db/db mice were administered either vehicle, Ang-(1-7) alone, or Ang-(1-7) combined with an inhibitor (losartan, PD123319, A-779, L-NAME or icatibant) daily for 14 days. An improvement in physiological heart function was observed in Ang-(1-7)-treated mice. Ang-(1-7) also reduced cardiomyocyte hypertrophy, fibrosis and inflammatory cell infiltration of the heart tissue and increased blood vessel number. These changes were blocked by antagonists of the MAS1, AT2 and bradykinin receptors and inhibition of NO formation. Treatment with Ang-(1-7) reduced glomerular damage and oxidative stress in kidney tissue. Bone marrow and circulating endothelial progenitors, as well as bone marrow mesenchymal stem cells, were increased in mice treated with Ang-(1-7). Short-term Ang-(1-7) treatment of young db/db mice improved heart function and reduced kidney damage. Treatment also improved bone marrow and circulating levels of endothelial and mesenchymal stem cells. All of this may contribute to improved cardiovascular and renal function.