OBJECTIVE Continuous beta-cell rest with diazoxide preserves residual endogenous insulin production in type 1 diabetes. However, side effects have hampered therapeutic usefulness. In a double-blind study, we tested whether lower, intermittent dosing of diazoxide had beneficial effects on insulin production, metabolic control, and autoimmunity markers in the absence of side effects. RESEARCH DESIGN AND METHODS Forty-one newly diagnosed type 1 diabetic patients were randomized to 6 months of treatment with placebo or 100 mg diazoxide at bedtime. A1C, C-peptide (fasting and glucagon stimulated), and FoxP3(+) regulatory T-cells (Tregs) were measured. Patients were followed for 6 months after intervention. RESULTS Of six dropouts, three were due to perceived side effects; one subject in the diazoxide group experienced rash, another dizziness, and one in the placebo group sleep disturbance. Adverse effects in others were absent. Diazoxide treatment reduced A1C from 8.6% at baseline to 6.0% at 6 months and 6.5% at 12 months. Corresponding A1C value in the placebo arm were 8.3, 7.3, and 7.5% (P < 0.05 for stronger reduction in the diazoxide group). Fasting and stimulated C-peptide decreased during 12 months similarly in both arms (mean -0.30 and -0.18 nmol/l in the diazoxide arm and -0.08 and -0.09 nmol/l in the placebo arm). The proportion of Tregs was similar in both arms and remained stable during intervention but was significantly lower compared with nondiabetic subjects. CONCLUSIONS Six months of low-dose diazoxide was without side effects and did not measurably affect insulin production but was associated with improved metabolic control.