Patients with type 1 diabetes are identified after the onset of the disease, when beta cell destruction is almost complete. beta cell regeneration from islet cell precursors might reverse this disease, but factors that can induce beta cell neogenesis and replication and prevent a new round of autoimmune destruction remain to be identified. Here we show that expression of IGF-I in beta cells of transgenic mice (in both C57BL/6-SJL and CD-1 genetic backgrounds) counteracts cytotoxicity and insulitis after treatment with multiple low doses of streptozotocin (STZ). STZ-treated nontransgenic mice developed high hyperglycemia and hypoinsulinemia, lost body weight, and died. In contrast, STZ-treated C57BL/6-SJL transgenic mice showed mild hyperglycemia for about 1 month, after which they normalized glycemia and survived. After STZ treatment, all CD-1 mice developed high hyperglycemia, hypoinsulinemia, polydipsia, and polyphagia. However, STZ-treated CD-1 transgenic mice gradually normalized all metabolic parameters and survived. beta cell mass increased in parallel as a result of neogenesis and beta cell replication. Thus, our results indicate that local expression of IGF-I in beta cells regenerates pancreatic islets and counteracts type 1 diabetes, suggesting that IGF-I gene transfer to the pancreas might be a suitable therapy for this disease.