Why ace inhibitor has the side effect of dry cough?

The inhibition of ACE (also known as kininase II and bradykinin dehydrogenase) prevents the conversion of angiotension I to angiotensin II, with consequent salutary benefits via the renin-angiotensin system in pathological states. ACE inhibitor cough is thought to be linked to the suppression of ACE, which is proposed to result in an accumulation of substances normally metabolized by ACE: bradykinin or tachykinins (with the consequent stimulation of vagal afferent nerve fibers) and substance P. However, the development of cough may result from a more complex cascade of events than originally believed. Bradykinin has been shown to induce the production of arachidonic acid metabolites and nitric oxide (NO), and there is some evidence that these products, which are subject to regulation by other pathways, may promote cough through proinflammatory mechanisms.

http://www.medscape.com/viewarticle/484537_2