A resurgent interest in T cells with regulatory activity has prompted many recent investigations into their potential role in pathogenesis and prevention of type 1 diabetes. While some studies have suggested that regulatory T cells participate in the preservation of active tolerance to autoantigens, findings obtained in multiple animal models for type 1 diabetes have documented the therapeutic induction of protective regulatory T cells. A review of the proposed mechanisms operative in regulatory T cell-mediated diabetes prevention indicates a common theme of localized regulatory T cell activation and subsequent suppression of pathogenic T cell trafficking, differentiation, and/or effector function. However, adaptation of experimental protocols for regulatory T cell induction to clinical applications faces several challenges. Immunization with self-antigens carries obvious risks especially in the face of multiple variables that can affect generation, trafficking, and regulatory activity of autoantigen-specific T cells. We also emphasize that the frequent use of lymphopenic recipients of adoptively transferred pathogenic and regulatory T cells constitutes a potentially confounding variable that further complicates translation into clinical settings. The therapeutic induction of regulatory T cells in prediabetic individuals carries great potential but is currently limited by the risks associated with deliberate generation of autoimmune responses that may exacerbate rather than ameliorate the autoimmune process. However, in vitro amplification and autologous regulatory T cell therapy might soon become a clinical reality.