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Type 1 diabetes mellitus (T1DM) is an autoimmune disease leading to near complete pancreatic beta-cell destruction. New evidence suggests that beta-cell regeneration is possible, but ongoing autoimmune damage prevents restoration of beta-cell mass. We tested the hypothesis that simultaneously blocking autoimmune cytokine damage and supplying a growth-promoting stimulus for beta-cells would provide a novel approach to reverse T1DM. Therefore, in this study we combined lisofylline to suppress autoimmunity and exendin-4 to enhance beta-cell proliferation for treating autoimmune-mediated diabetes in the non-obese diabetic (NOD) mouse model. We found that this combined therapy effectively reversed new-onset diabetes within a week of therapy, and even maintained euglycemia up to 145 days after treatment withdrawal. The therapeutic effect of this regimen was associated with improved beta-cell metabolism and insulin secretion, while reducing beta-cell apoptosis. It is possible that such combined therapy could become a new strategy to defeat T1DM in humans.