Nonobese diabetic (NOD) mice provide an excellent model of type 1 diabetes. The genetic contribution to this disease is complex, with more than 20 loci implicated in diabetes onset. One of the challenges for researchers using the NOD mouse model (and, indeed, other models of spontaneous autoimmune disease) has been the high density of sequence variation within candidate chromosomal segments. Furthermore, the scope for analyzing many putative disease loci via gene targeting has been hampered by the lack of NOD embryonic stem (ES) cells. We describe here the derivation of NOD ES cell lines capable of generating chimeric mice after stable genetic modification. These NOD ES cell lines also show efficient germline transmission, with offspring developing diabetes. The availability of these cells will not only enable the dissection of closely linked loci and the role they have in the onset of type 1 diabetes but also facilitate the generation of new transgenics.