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OBJECTIVE--Coinhibitory signals mediated via programmed death 1 (PD-1) receptor play a critical role in downregulating immune responses and in maintaining peripheral tolerance. Programmed death 1 ligand 1 (PD-L1), the interacting ligand for PD-1, widely expressed in many cell types, acts as a tissue-specific negative regulator of pathogenic T-cell responses. We investigated the protective potential of PD-L1 on autoimmune diabetes by transgenically overexpressing PD-L1 in pancreatic p-cells in nonobese diabetic (NOD) mice. RESEARCH DESIGN AND METHODS--We established an insulin promoter-driven murine PD-L1 transgenic NOD mouse model to directly evaluate the protective effect of an organ-specific PD-L1 transgene against autoimmune diabetes. Transgene expression, insulitis, and diabetic incidence were characterized in these transgenic NOD mice. Lymphocyte development, Th1 cells, and regulatory T-cells were analyzed in these transgenic mice; and T-cell proliferation, adoptive transfer, and islet transplantation were performed to evaluate the PD-L1 transgene-mediated immuneprotective mechanisms. RESULTS--The severity of insulitis in these transgenic mice is significantly decreased, disease onset is delayed, and the incidence of diabetes is markedly decreased compared with littermate controls. NOD/SCID mice that received lymphocytes from transgenic mice became diabetic at a slower rate than mice receiving control lymphocytes. Moreover, lymphocytes collected from recipients transferred by lymphocytes from transgenic mice revealed less proliferative potential than lymphocytes obtained from control recipients. Transgenic islets transplanted in diabetic recipients survived moderately longer than control islets. CONCLUSIONS--Our results demonstrate the protective potential of transgenic PD-L1 in autoimmune diabetes and illustrate its role in downregulating diabetogenic T-cells in NOD mice. Diabetes 57:1861-1869, 2008, Programmed death 1 (PD-1) is an immunoreceptor of the CD28/CTLA-4 family whose expression is induced in activated T- and B-cells and in macrophages (1,2). PD-1 has two cytoplasmic tyrosine motifs: [...]