Angiotensin converting enzyme 2 (ACE2) catalyzes the conversion of the vasoconstrictor angiotensin II (Ang II) to the vasodilatory peptide angiotensin-(1-7) [Ang-(1-7)]. We showed that treatment of hypertensive rats with the AT₁ receptor antagonist olmesartan increased ACE2 mRNA and protein in the thoracic aorta, suggesting that endogenous Ang II tonically reduces the enzyme. We now report that Ang II down-regulates ACE2 activity and mRNA in rat aortic vascular smooth muscle cells (VSMCs), to reduce the conversion of Ang II to Ang-(1-7). Although Ang-(1-7) alone had no effect on the regulation of ACE2 mRNA, the heptapeptide prevented the Ang II-mediated reduction in ACE2 mRNA, an effect blocked by the selective Ang-(1-7) receptor antagonist [D-Ala⁷]-Ang-(1-7). The reduction in ACE2 mRNA by Ang II was also prevented by the mitogen activated protein (MAP) kinase kinase inhibitor PD98059. Treatment of VSMCs with Ang II increased ERK1/ERK2 activity, which was significantly reduced by pretreatment with Ang-(1-7). Blockade of the Ang II-mediated reduction in ACE2 mRNA and increase in MAP kinase activity by Ang-(1-7) was prevented by pretreatment with sodium vanadate, a tyrosine phosphatase inhibitor, or okadaic acid, a serine/threonine phosphatase inhibitor, suggesting that the heptapeptide activates a MAP kinase phosphatase. This study is the first to show that the MAP kinase/phosphatase pathway is a primary molecular mechanism for regulating ACE2 to maintain the balance between Ang II and Ang-(1-7). The modulatory role of Ang-(1-7) in the regulation of ACE2 by Ang II suggests a complex interplay between the two peptides that is mediated by specific receptors to activate distinct signaling pathways.