Mouse antithymocyte globulin (mATG) prevents, as well as reverses, type 1 diabetes in NOD mice, through mechanisms involving modulation of the immunoregulatory activities of T lymphocytes. Dendritic cells (DC) play a pivotal role in the generation of T cell responses, including those relevant to the autoreactive T cells enabling type 1 diabetes. As Abs against DC are likely generated during production of mATG, we examined the impact of this preparation on the phenotype and function of DC to elucidate novel mechanisms underlying its beneficial activities. In vivo, mATG treatment transiently induced the trafficking of mature CD8(-) predominant DC into the pancreatic lymph node of NOD mice. Splenic DC from mATG-treated mice also exhibited a more mature phenotype characterized by reduced CD8 expression and increased IL-10 production. The resultant DC possessed a potent capacity to induce Th2 responses when cultured ex vivo with diabetogenic CD4(+) T cells obtained from BDC2.5 TCR transgenic mice. Cotransfer of these Th2-deviated CD4(+) T cells with splenic cells from newly diabetic NOD mice into NOD.RAG(-/-) mice significantly delayed the onset of diabetes. These studies suggest the alteration of DC profile and function by mATG may skew the Th1/Th2 balance in vivo and through such actions, represent an additional novel mechanism by which this agent provides its beneficial activities.