Background Diabetic hepatopathy is a serious complication of poorly controlled diabetes mellitus. An efficient antidiabetic drug which keeps normal liver tissues is not available. The renin-angiotensin system has been reported to be involved in both diabetic state and liver function. Aliskiren is a direct renin inhibitor and a recently antihypertensive drug with poly-pharmacological properties. The aim of the current study is to explore the possible hepatoprotective effects and mechanisms of action of aliskiren against streptozotocin (STZ) induced liver toxicity. Methods Mice were distributed to 3 groups; first: the normal control group, second: the diabetic control group, third: the diabetic group which received aliskiren (25 mg/kg; oral) for 4 weeks. At the end of the treatment period, plasma glucose, insulin, lipid profile, oxidative stress, and liver function tests were evaluated spectrophotometrically. ELISA technique was used to measure the expression levels of TNF-α and adiponectin. Furthermore, a Histopathological examination of liver samples was done. Results It was shown that aliskiren treatment ameliorated the STZ-induced oxidative stress and elevated inflammatory biomarkers, hypercholesterolemia, serum aminotransferases and alkaline phosphatase levels in diabetic mice. In addition, hepatocellular necrosis, and fibrosis were improved by aliskiren treatment. Conclusion aliskiren protects against the liver damage caused by STZ-induced diabetes. This can be explained by its ability to block angiotensin-II, and its anti-diabetic, hypocholesterolemic, antioxidant and anti-inflammatory effects. Aliskiren could be a novel therapeutic strategy to prevent liver diseases associated with hypertension and diabetes mellitus. Graphical Abstract