Type 1 diabetes is a chronic autoimmune disease in which genetic predispositions affect the immune system, leading to a loss of T cell tolerance to β cells and consequent T cell-mediated destruction of insulin-producing islet cells. Genetic studies have suggested that PRSS16 is linked to a diabetes susceptibility locus of the extended HLA class I region in humans. PRSS16 encodes what we believe to be a novel protease, thymus-specific serine protease (TSSP), which shows predominant expression in thymic epithelial cells and is suspected to have a restricted role in the class II presentation pathway. Consistently, Tssp is necessary for the intrathymic selection of few class II-restricted T cell receptor specificities in B6 mice. To directly assess the role of Tssp in autoimmune diabetes, we generated Tssp-deficient (Tssp°) NOD mice. While remaining immunocompetent, Tssp° NOD mice were protected from diabetes and severe insulitis. Diabetes resistance of Tssp° NOD mice was a property of the CD4 T cell compartment that is acquired during thymic selection and correlated with an impaired selection of CD4 T cells specific for islet antigens. Hence, in the NOD mouse, Tssp is a critical regulator of diabetes development through the selection of the autoreactive CD4 T cell repertoire.