It is known that angiotensin (Ang)-converting enzyme (ACE) 2 catalyzes Ang II to Ang 1-7 to prevent the detrimental effect of Ang II on blood pressure, renal fibrosis, and inflammation. However, mechanisms of renoprotective role of Ace2 remain largely unclear. The present study tested the hypothesis that deficiency of Ace2 may accelerate intrarenal Ang II-mediated fibrosis and inflammation independent of blood pressure in a model of unilateral ureteral obstructive (UUO) nephropathy induced in Ace2(+/y) and Ace2(-/y) mice. Results showed that both Ace2(+/y) and Ace2(-/y) mice had normal levels of blood pressure and plasma Ang II/Ang 1-7. In contrast, deletion of ACE2 resulted in a fourfold increase in the ratio of intrarenal Ang II/Ang 1-7 in the UUO nephropathy. These changes were associated with the development of more intensive tubulointerstitial fibrosis (α-SMA, collagen I) and inflammation (TNF-α, IL-1β, MCP-1, F4/80(+) cells, and CD3(+)T cells) in Ace2(-/y) mice at day 3 (all P<0.05) after UUO, becoming more profound at day 7 (all P<0.01). Enhanced renal fibrosis and inflammation in the UUO kidney of Ace2(-/y) mice were largely attributed to a marked increase in the intrarenal Ang II signaling (AT1-ERK1/2 mitogen-activated protein kinase), TGF-β/Smad2/3, and NF-κB signaling pathways. Further studies revealed that enhanced TGF-β/Smad and NF-κB signaling in the UUO kidney of Ace2(-/y) mice was associated with upregulation of an E3 ligase Smurf2 and a loss of renal Smad7. In conclusion, enhanced Ang II-mediated TGF-β/Smad and NF-κB signaling may be the mechanisms by which loss of Ace2 enhances renal fibrosis and inflammation. Smad7 ubiquitin degradation mediated by Smurf2 may be a central mechanism by which Ace2(-/y) mice promote TGF-β/Smad2/3-mediated renal fibrosis and NF-κB-driven renal inflammation in a mouse model of UUO nephropathy.