The Renin-Angiotensin System (RAS) possesses a counter-regulatory axis composed of angiotensin converting enzyme (ACE)2, angiotensin-(1-7) [Ang-(1-7)] and the Mas receptor, which opposes many AT1-receptor-mediated effects of ligand angiotensin II. Ang-(1-7), as a ligand of the Mas receptor, has inhibitory effects on renal inflammation and fibrosis in experimental diabetes. However, Ang-(1-7) has a short half-life in plasma, which may render it unsuitable for use in clinics. Here, we investigated the effects of the lanthionine-stabilized Ang-(1-7), cyclic (c)Ang-(1-7), a lanthipeptide that is more peptidase-resistant than the linear peptide, in BTBR ob/ob mice with type 2 diabetic nephropathy. BTBR ob/ob mice received vehicle, cAng-(1-7), or the ACE inhibitor lisinopril. The treatment started at ten weeks of age, when the animals had already developed albuminuria, and ended at 19-20 weeks of age. cAng-(1-7) limited albuminuria progression, and limited podocyte dysfunction similarly to lisinopril. cAng-(1-7), unlike lisinopril, reduced glomerular fibrosis and inflammation, and counteracted glomerular capillary rarefaction. Furthermore, when cAng-(1-7) was combined with lisinopril, a superior antiproteinuric effect than with lisinopril alone was found, in association with better preservation of podocyte proteins and amelioration of capillary density. Thus, adding cAng-(1-7) to ACE-inhibitor therapy could benefit those diabetic patients who do not respond completely to ACE-inhibitor therapy.