Insulin is a major target of the autoimmune response associated with destruction of pancreatic beta cells in type 1 diabetes. A peptide that spans the junction of the insulin B chain and the connecting (C) peptide in proinsulin has been reported to stimulate T cells from humans at risk for type 1 diabetes and autoimmune diabetes-prone NOD mice. Here we show that proinsulin B24-C36 peptide binds to I-A(g7), the MHC class II molecule of the NOD mouse, and, after intranasal administration, induces regulatory CD4(+) T cells that, in the absence of CD8(+) T cells, block the adoptive transfer of diabetes. Curiously, however, intranasal B24-C36 did not inhibit development of spontaneous diabetes in treated mice. We then determined that B24-C36, and its core sequence B25-C34, bind to K(d), the NOD mouse MHC class I molecule, and elicit CD8(+) CTLs. When the CD8(+) T lymphocyte epitope was truncated at the C34 valine anchor residue for binding to K(d), the residual CD4(+) T cell epitope, B24-C32/33, significantly inhibited diabetes development after a single intranasal dose. This study identifies a novel CTL epitope in proinsulin and demonstrates that the therapeutic potential of a "tolerogenic" autoantigen peptide can be compromised by the presence of an integral CTL epitope.