Type 1 diabetic patients are diagnosed when beta-cell destruction is almost complete. Reversal of type 1 diabetes will require beta-cell regeneration from islet cell precursors and prevention of recurring autoimmunity. IGF-I expression in beta-cells of streptozotocin (STZ)-treated transgenic mice regenerates the endocrine pancreas by increasing beta-cell replication and neogenesis. Here, we examined whether IGF-I also protects islets from autoimmune destruction. Expression of interferon (IFN)-beta in beta-cells of transgenic mice led to islet beta(2)-microglobulin and Fas hyperexpression and increased lymphocytic infiltration. Pancreatic islets showed high insulitis, and these mice developed overt diabetes when treated with very-low doses of STZ, which did not affect control mice. IGF-I expression in IFN-beta-expressing beta-cells of double-transgenic mice reduced beta(2)-microglobulin, blocked Fas expression, and counteracted islet infiltration. This was parallel to a decrease in beta-cell death by apoptosis in islets of STZ-treated IGF-I+IFN-beta-expressing mice. These mice were normoglycemic, normoinsulinemic, and showed normal glucose tolerance. They also presented similar pancreatic insulin content and beta-cell mass to healthy mice. Thus, local expression of IGF-I prevented islet infiltration and beta-cell death in mice with increased susceptibility to diabetes. These results indicate that pancreatic expression of IGF-I may regenerate and protect beta-cell mass in type 1 diabetes.