Type 1 diabetes is caused by autoimmune destruction of β-cells. Although immunotherapy can restore self-tolerance thereby halting continued immune-mediated β-cell loss, residual β-cell mass and function is often insufficient for normoglycemia. Using a growth factor to boost β-cell mass can potentially overcome this barrier and prolactin (PRL) may fill this role. Previous studies have shown that PRL can stimulate β-cell proliferation and up-regulate insulin synthesis and secretion while reducing lymphocytic infiltration of islets, suggesting that it may restore normoglycemia through complementary mechanisms. Here, we test the hypothesis that PRL can improve the efficacy of an immune modulator, the anticluster of differentiation 3 monoclonal antibody (aCD3), in inducing diabetes remission by up-regulating β-cell mass and function. Diabetic nonobese diabetic (NOD) mice were treated with a 5-day course of aCD3 with or without a concurrent 3-week course of PRL. We found that a higher proportion of diabetic mice treated with the aCD3 and PRL combined therapy achieved diabetes reversal than those treated with aCD3 alone. The aCD3 and PRL combined group had a higher β-cell proliferation rate, an increased β-cell fraction, larger islets, higher pancreatic insulin content, and greater glucose-stimulated insulin release. Lineage-tracing analysis found minimal contribution of β-cell neogenesis to the formation of new β-cells. Although we did not detect a significant difference in the number or proliferative capacity of T cells, we observed a higher proportion of insulitis-free islets in the aCD3 and PRL group. These results suggest that combining a growth factor with an immunotherapy may be an effective treatment paradigm for autoimmune diabetes.