The incidence of Type 1 diabetes has been increasing at a rate too rapid to be due to changes in genetic risk. Instead changes in environmental factors are the likely culprit. The endoplasmic reticulum (ER) plays an important role in the production of newly synthesized proteins and interference with these processes leads to ER stress. The insulin-producing beta cells are particularly prone to ER stress as a result of their heavy engagement in insulin production. Increasing evidence suggests ER stress is central to initiation and progression of Type 1 diabetes. An early environmental exposure, such as toxins and viral infections, can impart a significant physiological load on beta cells to initiate abnormal processing of proinsulin, ER stress and insulin secretory defects. Release of altered proinsulin from the beta cells early in life may trigger autoimmunity in those with genetic susceptibility leading to cytokine-induced nitric oxide production and so exacerbating ER stress in beta cells, ultimately leading to apoptosis of beta cells and diabetes. Here we suggest that ER stress is an inherent cause of beta cell dysfunction and environmental factors, in particular dietary toxins derived from Streptomyces in infected root vegetables, can impart additional stress that aggravates beta cell death and progression to diabetes. Furthermore, we propose that the increasing incidence of Type 1 diabetes may be accounted for by increased dietary exposure to ER-stress-inducing Streptomyces toxins.