Diabetic retinopathy (DR) is the leading cause of vision loss as a major complication of diabetes mellitus. The blood—retinal barrier (BRB) breakdown is a critical early event in the pathogenesis of DR. It has been known that the rennin-angiotensin system (RAS) is important in the progression of the DR via angiotensin II (Ang II), the effector of RAS. In this study, we showed that blockade of Ang II attenuates vascular endothelial growth factor (VEGF)-mediated BRB breakdown in DR. In streptozotocin-induced diabetes, retinal vascular permeability increased with upregulation of VEGF, where Ang II and its receptors were upregulated. Ang II induced VEGF expression in retinal endothelial cells accompanied by loss of tight junction proteins. However, the blockade of Ang II by perindopril, an angiotensin converting enzyme (ACE) inhibitor, inhibited upregulation of VEGF, and prevented the loss of tight junction proteins. Moreover, inhibition of Ang II by perindopril attenuated increased vascular permeability of diabetic retina accompanied by recovery of tight junction proteins in retinal vessels. Therefore, we suggest that the RAS involves in increased vascular permeability during early stage of DR, which is mediated by VEGF. Furthermore, the ACE inhibitor may have a therapeutic potential in the treatment of diabetic BRB breakdown.