The autoimmune-mediated beta-cell death in type 1 diabetes (T1DM) is associated with local inflammation (insulitis). We examined the role of MCPIP1 (monocyte chemotactic protein-induced protein 1), a novel cytokine-induced antiinflammatory protein, in this process. Basal MCPIP1 expression was lower in rat vs. human islets and beta-cells. Proinflammatory cytokines stimulated MCPIP1 expression in rat and human islets and in insulin-secreting cells. Moderate overexpression of MCPIP1 protected insulin-secreting INS1E cells against cytokine toxicity by a mechanism dependent on the presence of the PIN/DUB domain in MCPIP1. It also reduced cytokine-induced Chop and C/ebpβ expression and maintained MCL-1 expression. The shRNA-mediated suppression of MCPIP1 led to the potentiation of cytokine-mediated NFκB activation and cytokine toxicity in human EndoC-βH1 beta-cells. MCPIP1 expression was very high in infiltrated beta-cells before and after diabetes manifestation in the LEW.1AR1-iddm rat model of human T1DM. The extremely high expression of MCPIP1 in clonal beta-cells was associated with a failure of the regulatory feedback-loop mechanism, ER stress induction and high cytokine toxicity. In conclusion, our data indicate that the expression level of MCPIP1 affects the susceptibility of insulin-secreting cells to cytokines and regulates the mechanism of beta-cell death in T1DM.