T helper type 17 (Th17) cells have been shown to be pathogenic in autoimmune diseases; however, their role in type 1 diabetes (T1D) remains inconclusive. We have found that Th17 differentiation of CD4+ T cells from BDC2·5 T cell receptor transgenic non-obese diabetic (NOD) mice can be driven by interleukin (IL)-23 + IL-6 to produce large amounts of IL-22, and these cells induce T1D in young NOD mice upon adoptive transfer. Conversely, polarizing these cells with transforming growth factor (TGF)-β + IL-6 led to non-diabetogenic regulatory Th17 (Treg17) cells that express high levels of aryl hydrocarbon receptor (AhR) and IL-10 but produced much reduced levels of IL-22. The diabetogenic potential of these Th17 subsets was assessed by adoptive transfer studies in young NOD mice and not NOD.severe combined immunodeficient (SCID) mice to prevent possible transdifferentiation of these cells in vivo. Based upon our results, we suggest that both pathogenic Th17 cells and non-pathogenic regulatory Treg17 cells can be generated from CD4+ T cells under appropriate polarization conditions. This may explain the contradictory role of Th17 cells in T1D. The IL-17 producing Treg17 cells offer a novel regulatory T cell population for the modulation of autoimmunity.