T cell tolerance to peripheral antigens is believed to result mainly from the inability of parenchymal cells to present antigens in an immunogenic form due to the lack of expression of T cell costimulator. We found, however, that transgenic expression of the T cell costimulator B7-1 on the islets of Langerhans is not sufficient to abolish the in vivo tolerance to islets antigen. Here, we present evidence indicating that the level of major histocompatibility complex (MHC) antigen expressed by islet cells plays a critical role. Mice coexpressing the B7-1 transgene and high levels of the class II MHC antigen I-E on the islets develop an autoimmune destruction of the beta cells of the pancreas. By contrast, expression of the I-E molecule by islets, in the absence of T cell costimulator, leads to specific tolerance of these autoreactive T cells that cannot be reversed by costimulation with B7-1.