During insulin-dependent diabetes mellitus, islet invading immune cells destroy beta cells over a prolonged asymptomatic pre-diabetic period. Cytokines synthesised and secreted by specific immune cells within the islet infiltrate may be crucial effectors of beta cell destruction or protection during the disease. Interleukin-1beta may be a key cytokine which may act in concert with other cytokines in initiating and/or promoting beta cell destruction. We have examined this hypothesis in NOD mice by assessing the intra-islet expression and co-localization of interleukin-1beta at different time-points following cyclophosphamide administration. We have also tested the effects of long-term oral nicotinamide given to NOD mice in suppressing intra-islet expression of the cytokine in this accelerated model. Cyclophosphamide was administered to day 95 female NOD mice. Pancreatic tissues were examined by dual-label confocal immunofluorescence microscopy for the expression and co-localization of interleukin-1beta at days 0, 4, 7, 11 and at onset of diabetes (day 14). Diabetes developed in 7/11 mice 14 days after administration of cyclophosphamide while nicotinamide completely prevented the disease. At day 0, interleukin-1beta immunolabelling was observed in selective intra-islet macrophages, several somatostatin cells and in a few beta cells. However, at day 4, it was seen mostly in somatostatin and some beta cells. At day 7, an increasing number of interleukin-1beta cells were observed within the islets and co-localized to several somatostatin cells, beta cells and macrophages. The mean number of intra-islet interleukin-1beta cells reached a peak at day 11 and was significantly higher than at day 7 (p = 0.05) and at day 14 (onset of diabetes; p = 0.03). At day 11, interleukin-1beta immunolabelling was also present in selective macrophages which co-expressed inducible nitric oxide synthase. At onset of diabetes, some macrophages, residual beta cells and somatostatin cells showed immunolabelling for the cytokine. Exposure of NOD mice to oral nicotinamide was associated with a considerably reduced expression of interleukin-1beta cells within the islet at day 11 (p = 0.002). We conclude that cylophosphamide treatment enhances the expression of interleukin-1beta in selective macrophages, somatostatin and beta cells during the course of the disease. Its expression reaches a maximum immediately prior to onset of diabetes. Interleukin-1beta present in intra-islet macrophages, somatostatin and beta cells may influence its expression by autocrine and paracrine means. Interleukin-1beta expression within islet macrophages may also up-regulate inducible nitric oxide synthase within the same macrophage or adjacent macrophage populations. These intra-islet molecular events may corroborate with other local cytotoxic processes leading to beta cell destruction. Oral nicotinamide may attenuate intra-islet expression of interleukin-1beta and thus inducible nitric oxide synthase during prevention of Type 1 diabetes in this animal model. The expression of interleukin-1beta in specific islet endocrine cell-types shown in this study requires further investigation.