Vasoinhibin is a fragment of the hormone prolactin (PRL) that inhibits angiogenesis, vasopermeability, and vasodilation. Cathepsin D (CTSD) cleaves the N-terminal of PRL to generate vasoinhibin in the retina of neonate mice as revealed by the CTSD inhibitor, pepstatin A. However, pepstatin A also inhibits renin. Because renin is expressed in the retina and the renin-angiotensin system gives rise to peptides with positive and negative effects on blood vessel growth and function, we investigated whether renin cleaves PRL to vasoinhibin in the newborn mouse retina and in the circulation. Newborn mouse retinal extracts from wild-type and CTSD-null newborn mice cleaved PRL to a 14 kDa vasoinhibin and such cleavage was prevented by heat-inactivation, pepstatin A, and the selective renin inhibitor VTP-27999 suggesting the contribution of renin. In agreement, recombinant renin cleaved different species PRLs to the expected 14-kDa vasoinhibin, a mass consistent with a consensus renin cleavage site located at Leu124-Leu125 in rat and mouse PRLs and at Leu126-Leu127 in human, bovine, and ovine PRLs. Dehydration followed by rehydration (D/R) in rats increased the levels of renin and PRL in plasma. Further increase in PRL circulating levels by the dopamine D2 receptor blocker, sulpiride, enabled detection of 14 kDa vasoinhibin in D/R rats. Moreover, the incubation of PRL with plasma from D/R rats generated a 14-kDa vasoinhibin that was prevented by VTP-27999. These findings add renin to the list of PRL-cleaving proteases and introduce vasoinhibin as a putative renin-angiotensin system-mediated mechanism for regulating blood vessel growth and function.