The renin-angiotensin system (RAS) has mainly been categorized as a circulating and a local tissue RAS. A new component of the local system, known as the intracellular RAS, has recently been described. The intracellular RAS is defined as synthesis and action of ANG II intracellularly. This RAS appears to differ from the circulating and the local RAS, in terms of components and the mechanism of action. These differences may alter treatment strategies that target the RAS in several pathological conditions. Recent work from our laboratory has demonstrated significant upregulation of the cardiac, intracellular RAS in diabetes, which is associated with cardiac dysfunction. Here, we have reviewed evidence supporting an intracellular RAS in different cell types, ANG II's actions in cardiac cells, and its mechanism of action, focusing on the intracellular cardiac RAS in diabetes. We have discussed the significance of an intracellular RAS in cardiac pathophysiology and implications for potential therapies.