Immunization of NOD mice with autoantigens such as glutamic acid decarboxylase (GAD) 221-235 peptide (p221) can induce Ag-specific CD4(+) T regulatory (Tr) cells. However, it is unclear whether these Tr cells acquire their regulatory capacity due to immunization or whether they are constitutively harbored in unimmunized naive mice. To address this question, we used an I-Ag7 tetramer to isolate p221-specific T cells from naive NOD mice (N221(+) cells) after peptide-specific in vitro expansion. The N221(+) T cells produced IFN-gamma and IL-10, but very little IL-4, in response to p221 stimulation. These T cells could function as regulatory cells and inhibit in vitro proliferation of diabetogenic BDC2.5 cells. This suppressive activity was cell contact-independent and was abrogated by Abs to IL-10 or IL-10R. Interestingly, IL-2 produced by other T cells present in the cell culture induced unactivated N221(+) T cells to exhibit regulatory activities involving production of IL-10. In vivo, N221(+) cells inhibited diabetes development when cotransferred with NOD splenocytes into NOD/scid recipients. Together, these results demonstrate that p221-specific IL-10-dependent Tr cells, including Tr type 1 cells, are present in naive NOD mice. The use of spontaneously arising populations of GAD peptide-specific Tr cells may represent a promising immunotherapeutic approach for preventing type 1 diabetes.