The goal of this proposal is to reverse Type 1 diabetes by inducing tolerance to the autoimmune process and replenishing lost islet cells from precursors. Previous clinical studies by Dr. Herold have shown that treatment with an anti-CD3 monoclonal antibody can prevent the loss of insulin production for up to 2 years after onset of diabetes, and preclinical studies suggest that anti-CD3 mAb induces tolerance to the autoimmune disease. However, to establish normal metabolic control, this therapy must be combined with a means of replenishing lost islet tissue. We will test whether, after induction of immunologic tolerance, islets will regenerate, can be stimulated to grow, or whether embryonic stem cells from the pancreatic anlagen may be used to replenish the lost beta cell mass. The proposal will develop a partnership between Dr. Kevan Herold, whose work has been in the immunology and immunotherapy of Type 1 diabetes and Dr. Virginia Papaioannou, who is an expert in the field of developmental biology but who has not previously worked in the field of diabetes. We will first determine whether induction of immune tolerance to autoimmune diabetes in the NOD mouse results in islet cell proliferation. Studies in this aim will include immunohistochemical and molecular analyses of developing insulin+ cells. We will test whether islet cell regeneration can be stimulated using exendin-4 and hepatocyte growth factor which can stimulate beta cell development in non-immune mediated animal models of insulin deficiency. We will test whether stem cells can be grown into islets that can correct diabetes by transplanting pancreatic anlagen from normal MHC matched mice into diabetic NOD mice treated with anti-CD3 mAb. Differentiation into mature pancreatic cells will be studied, and a fluorochrome tagged donor will enable us to identify the source of any newly differentiated insulin+ cell. By comparing this process in the presence or absence of anti-CD3 mAb treatment with hyper or euglycemia, we will be able to obtain additional information including expression of disease relevant islet antigens, and the effects of insulin and glucose on differentiation of islet cells. Drs. Herold and Papaioannou will collaborate closely particularly in the molecular and stem cell studies proposed. By combining the expertise of the two Pl's to address the problems of islet autoimmunity and beta cell deficiency our proposal will test a combination strategy that may be useful in patients.