An animal model [the nonobese diabetic (NOD) mouse] for type I diabetes features a striking infiltration of T cells into the pancreatic islets. This infiltration selectively destroys beta cells. Most of the T cells are Lyt-1+, but some are Lyt-2+,3+. Transfer experiments using parabiosis revealed that insulitis can be transferred within 2 weeks after parabiosis to immunoincompetent thymectomized mice. When NOD mice (6 mo old) were irradiated and reconstituted with bone marrow cells from young BALB/c nu/nu mice (less than 2 mo old), the NOD mice exhibited neither insulitis nor overt diabetes. Deposits of immunoglobulin in mesangial areas of the glomeruli disappeared within 3 mo after bone marrow transplantation in such irradiated allogeneic bone marrow reconstituted mice. Assays for immunological functions, including mitogen response and mixed lymphocyte reaction, revealed that both T- and B-cell functions were increased in NOD mice with overt diabetes. NOD mice reconstituted with BALB/c nu/nu bone marrow cells displayed normal T- and B-cell functions. The newly developed T cells in the allogeneic bone marrow recipients are tolerant to cells with both donor- and host-type major histocompatibility complex determinants. These results suggest that bone marrow transplantation may ultimately be developed as a component of a strategy to be employed for treatment of type I diabetes in humans.