The major histocompatibility complex (MHC) of the type 1 diabetes-prone NOD mouse lacks a functional class II H2-Ea gene such that antigen presenting cells (APCs) are I-E null. Transgenic expression of Ea in NOD mice both restores I-E expression and confers complete protection from diabetes progression. Non-myeloablative neonatal transplantation of bone marrow cells from such I-E+ transgenic donors into NOD recipients resulted in low-level but long-term haematopoietic stem cell (HSC) engraftment. Despite low levels of I-E antigen expression in blood (averaging 0.4-3.8% of total MHC class II-positive population), chimeric recipients were protected from overt diabetes, although not insulitis development. Adoptive transfer of diabetes into immunodeficient NOD-Rag recipients that received chimeric splenocytes from primary recipients confirmed the presence of an autoreactive T cell repertoire. The demonstration that purified T cells from these weak chimeras were not tolerant to irradiated transgenic I-E+ splenocytes indicated that I-E+ donor cells provide a constant, low-level immune stimulation capable of up-regulating nominally deficient immunoregulatory networks. This study raises the possibility that cord blood HSCs from infants with high risk HLA haplotypes and a family history of type 1 diabetes might be re-introduced without myoablative treatments following transfection with a single HLA class II allele associated with diabetes resistance.