Type 1 diabetes mellitus (T1D) is caused by the destruction of insulin-producing β cells in pancreatic islets by autoimmune T cells. Islet transplantation has been established as an effective therapeutic strategy for T1D. However, the survival of islet grafts can be disrupted by recurrent autoimmunity. Dimethyl sulfoxide (DMSO) is a solvent for organic and inorganic substances and an organ-conserving agent used in solid organ transplantations. DMSO also exerts anti-inflammatory, reactive oxygen species scavenger and immunomodulatory effects and therefore exhibits therapeutic potential for the treatment of several human inflammatory diseases. In this study, we investigated the therapeutic potential of DMSO in the inhibition of autoimmunity. We treated an animal model of islet transplantation (NOD mice) with DMSO. The survival of the syngeneic islet grafts was significantly prolonged. The population numbers of CD8, DC and Th1 cells were decreased, and regulatory T (Treg) cell numbers were increased in recipients. The expression levels of IFN-γ and proliferation of T cells were also reduced following DMSO treatment. Furthermore, the differentiation of Treg cells from naive CD4 T cells was significantly increased in the in vitro study. Our results demonstrate for the first time that in vivo DMSO treatment suppresses spontaneous diabetes and autoimmune recurrence in NOD mice by inhibiting the Th1 immune response and inducing the differentiation of Treg cells.