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In BDC2·5 non-obese diabetic (BDC2·5NOD) mice, a spontaneous model of type 1 diabetes, CD4+ T cells express a transgene-encoded T cell receptor (TCR) with reactivity against a pancreatic antigen, chromogranin. This leads to massive infiltration and destruction of the pancreatic islets and subsequent diabetes. When we reconstituted lethally irradiated, lymphocyte-deficient B6.g7 (I-Ag7+) Rag–/– mice with BDC2·5NOD haematopoietic stem and progenitor cells (HSPC; ckit+Lin–Sca-1hi), the recipients exhibited hyperglycaemia and succumbed to diabetes. Surprisingly, lymphocyte-sufficient B6.g7 mice reconstituted with BDC2·5NOD HSPCs were protected from diabetes. In this study, we investigated the factors responsible for attenuation of diabetes in the B6.g7 recipients. Analysis of chimerism in the B6.g7 recipients showed that, although B cells and myeloid cells were 98% donor-derived, the CD4+ T cell compartment contained ˜50% host-derived cells. These host-derived CD4+ T cells were enriched for conventional regulatory T cells (Tregs) (CD25+forkhead box protein 3 (FoxP3)+] and also for host- derived CD4+CD25–FoxP3– T cells that express markers of suppressive function, CD73, FR4 and CD39. Although negative selection did not eliminate donor-derived CD4+ T cells in the B6.g7 recipients, these cells were functionally suppressed. Thus, host-derived CD4+ T cells that emerge in mice following myeloablation exhibit a regulatory phenoytpe and probably attenuate autoimmune diabetes. These cells may provide new therapeutic strategies to suppress autoimmunity.