Autoimmune destruction of β cells is the cause of most cases of type 1 diabetes mellitus. Lymphocytic insulitis has been documented in the early phases of this disease as well as in recurrent diabetes after pancreas transplantation and in certain viral infections. We report a unique case of granulomatous insulitis in a patient with an endocrine tumor of the pancreas that clinically manifested as acute-onset insulin-dependent diabetes mellitus. Granulomata were present in islets with complete disappearance of β cells, as well as in the primary tumor, metastases, and lymph nodes. We postulate that these granulomata represent a sarcoid-like reaction to the tumor with secondary injury to nonneoplastic endocrine cells through a mechanism of molecular mimicry.