Type 1 diabetes mellitus (T1DM) is a chronic autoimmune disease with a strong inflammatory component. The latest studies indicate that innate immunity and inflammatory mediators have a much broader role in T1DM than initially assumed. Inflammation might contribute to early induction and amplification of the immune assault against pancreatic beta cells and, at later stages, to the stabilization and maintenance of insulitis. Inflammatory mediators probably contribute to the suppression of beta-cell function and subsequent apoptosis; they may also inhibit or stimulate beta-cell regeneration and might cause peripheral insulin resistance. The different effects of inflammation take place in different phases of the course of T1DM, and should be considered in the context of a 'dialog' between invading immune cells and the target beta cells. This dialog is mediated both by cytokines and chemokines that are released by beta cells and immune cells, and by putative, immunogenic signals that are delivered by dying beta cells. In this Review, we divided the role of inflammation in T1DM into three arbitrary stages: induction, amplification and maintenance or resolution of insulitis. These stages, and their progression or resolution, might depend on a patient's genetic background, which contributes to disease heterogeneity.