T lymphocytes have been implicated in the onset of many autoimmune diseases; however, the mechanisms underlying T-cell activation toward self antigens are poorly understood. To study whether T-lymphocyte costimulation can overcome the immunologic unresponsiveness observed in an in vivo model, we have created transgenic mice expressing the costimulatory mouse molecule B7-1, a ligand for the CD28 receptor, on pancreatic beta cells. We now report that triple-transgenic mice expressing both B7-1 and a viral glycoprotein on their beta cells, along with T cells expressing the viral-glycoprotein-specific transgenic T-cell receptor, all develop insulitis (lymphocytic infiltration of the pancreatic islets) and diabetes. In striking contrast, the T cells in double-transgenic mice expressing the same viral glycoprotein (but no B7) on their pancreatic beta cells and the transgenic T-cell receptor on their T cells, reported earlier, remain indifferent to the glycoprotein-expressing beta cells. In fact, all three transgenes are required to initiate immune-mediated destruction of the beta cells. Mice expressing any of the transgenes alone, or any two in combination, maintain normal islet architecture and never spontaneously develop insulitis or diabetes. Our results show that aberrant B7 expression on peripheral tissues may play an important role in the activation of self-reactive T cells and further suggest that abnormal expression of costimulatory receptors may be involved in various T-cell-mediated autoimmune diseases.