OBJECTIVE To determine whether ACE inhibitors reduce the risk of type 2 diabetes using a Mendelian randomization (MR) approach. RESEARCH DESIGN AND METHODS A two-sample MR analysis included 17 independent genetic variants associated with ACE serum concentration in 4,147 participants from the Outcome Reduction with Initial Glargine INtervention (ORIGIN) (clinical trial reg. no. NCT00069784) trial, and their effects on type 2 diabetes risk were estimated from 18 studies of the DIAbetes Genetics Replication And Meta-analysis (DIAGRAM) consortium. A genetic risk score (GRS) underpinning lower ACE concentration was then tested for association with type 2 diabetes prevalence in 341,872 participants, including 16,320 with type 2 diabetes, from the UK Biobank. MR estimates were compared after standardization for blood pressure change, with the estimate obtained from a randomized controlled trial (RCT) meta-analysis of ACE inhibitors versus placebo (n = 31,200). RESULTS Genetically lower ACE concentrations were associated with a lower risk of type 2 diabetes (odds ratio [OR] per SD 0.92 [95% CI 0.89–0.95]; P = 1.79 × 10−7). This result was replicated in the UK Biobank (OR per SD 0.97 [0.96–0.99]; P = 8.73 × 10−4). After standardization, the ACE GRS was associated with a larger decrease in type 2 diabetes risk per 2.4-mmHg lower mean arterial pressure (MAP) compared with that obtained from an RCT meta-analysis (OR per 2.4-mmHg lower MAP 0.19 [0.07–0.51] vs. 0.76 [0.60–0.97], respectively; P = 0.007 for difference). CONCLUSIONS These results support the causal protective effect of ACE inhibitors on type 2 diabetes risk and may guide therapeutic decision making in clinical practice.