We used data from patients with stable coronary artery disease (CAD) to assess the risk of new-onset diabetes mellitus (NOD) with β blockers and to determine whether angiotensin-converting enzyme (ACE) inhibition would modify this risk. The Prevention of Events with Angiotensin Converting Enzyme Inhibition (PEACE) trial randomized 8,290 patients with stable CAD to trandolapril or placebo. Presence of NOD was assessed at each study visit over a median follow-up time of 4.8 years. We examined the risk of NOD associated with β-blocker use with Cox regression models adjusting for 25 baseline covariates and tested whether this risk was modified by randomization to the ACE inhibitor. Of 6,910 patients without diabetes mellitus at enrollment (1,179 women and 5,731 men, mean age 64 ± 8 years), 4,147 (60%) were taking β blockers and 733 (8.8%) developed NOD. We observed a significant interaction between β-blocker use and randomization to ACE inhibitor with respect to NOD (p = 0.028). Participants taking β blockers assigned to the placebo group (n = 2,090) were at increased risk for NOD adjusting for baseline covariates (hazard ratio 1.63, 95% confidence interval 1.29 to 2.05, p <0.001), and this risk was attenuated in those assigned to trandolapril (n = 2,057, hazard ratio 1.11, 95% confidence interval 0.87 to 1.42, p = 0.39). β blocker use was associated with increased risk for NOD in patients with stable CAD, and this risk was decreased in patients treated concurrently with an ACE inhibitor. In conclusion, these data suggest that ACE inhibition may attenuate the risk for glucose abnormalities observed in patients taking β blockers.