In this article, we will examine the roles of transgenic and knockout animals that aid us in understanding two autoimmune diseases-type 1 (insulin-dependent) diabetes and multiple sclerosis. The first sections will focus on studies in type 1 diabetes to show how genetically altered animals have given insight into the role of various immune cell types, autoantigens, co-stimulatory molecules, cytokines and, finally, the role of various effector pathways in the pathogenesis of diabetes. The second section concentrating on the animal model of multiple sclerosis, experimental autoimmune encephalomyelitis (EAE), will show how animals that express a T-cell receptor derived from a clone able to cause disease have given insight into the pathogenesis of EAE.