Aims/hypothesis Displaying immunomodulatory capacities, mesenchymal stem cells (MSCs) are considered as beneficial agents for autoimmune diseases. The aim of this study was to examine the ability of MSCs to prevent autoimmune diabetes in the NOD mouse model. Methods Prevention of spontaneous insulitis or of diabetes was evaluated after a single i.v. injection of MSCs in 4-week-old female NOD mice, or following the coinjection of MSCs and diabetogenic T cells in irradiated male NOD recipients, respectively. The frequency of CD4 + FOXP3 + cells and Foxp3 mRNA levels in the spleen of male NOD recipients were also quantified. In vivo cell homing was assessed by monitoring 5,6-carboxyfluorescein diacetate succinimidyl ester (CFSE)-labelled T cells or MSCs. In vitro, cell proliferation and cytokine production were assessed by adding graded doses of irradiated MSCs to insulin B9-23 peptide-specific T cell lines in the presence of irradiated splenocytes pulsed with the peptide. Results MSCs reduced the capacity of diabetogenic T cells to infiltrate pancreatic islets and to transfer diabetes. This protective effect was not associated with the modification of diabetogenic T cell homing, but correlated with a preferential migration of MSCs to pancreatic lymph nodes. While injection of diabetogenic T cells resulted in a decrease in levels of FOXP3 + regulatory T cells, this decrease was inhibited by MSC co-transfer. Moreover, MSCs were able to suppress both allogeneic and insulin-specific proliferative responses in vitro. This suppressive effect was associated with the induction of IL10-secreting FOXP3 + T cells. Conclusions/interpretation MSCs prevent autoimmune beta cell destruction and subsequent diabetes by inducing regulatory T cells. MSCs may thus offer a novel cell-based approach for the prevention of autoimmune diabetes and for islet cell transplantation.