Previous studies have demonstrated that antigen-specific tolerance could be induced by lipopolysaccharide (LPS)-stimulated B cells retrovirally transduced with an immunoglobulin-antigen (or epitope-containing peptide) fusion construct. To investigate the mechanism of this gene therapy system, we now adapted this approach to immunotherapy of spontaneous diabetes in nonobese diabetic (NOD) mice, a T-cell-mediated autoimmune disease triggered, in part, by a pathogenic response to glutamate decarboxylase (GAD) 65. We demonstrate that LPS-stimulated splenocytes, retrovirally transfected with GAD-IgG fusion construct, induce a significant antigen-specific hyporesponsiveness at both cellular and humoral levels and reduce the incidence of diabetes in female NOD mice. Parallel with disease protection, we observed a prolonged increase of the numbers of CD4 + CD25 + T cells in the periphery of GAD-IgG-treated mice, compared to those treated with a control IgG vector, both in the prediabetic period and persisting even 8 months after gene therapy. This increase appeared to be induced by the repeated stimulation of the antigen in the periphery instead of a result of differentiation of T-cell precursor in the thymus. Moreover, CD4 + CD25 + T cells induced by GAD-IgG fusion construct were capable of suppressing the proliferative response of CD4 + CD25 À T cells in vitro; and ablation of the activity of CD4 + CD25 + T cells by blocking antibody against CD25 could reverse GAD-specific T-cell hyporesponsiveness. These results suggested that CD4 + CD25 + T-cell subset induced in GAD-IgG-treated NOD mice represented the regulatory or suppressive CD4 + CD25 + T cells (Treg) and might play an important role in the induction and maintenance of tolerance in NOD mice. Furthermore, the numbers of splenic CD4 + CD62L + regulatory T cells in GAD-IgG-treated mice during the prediabetic period and serum TGF-b levels in 34-38-week-old GAD-IgG-protected mice were also increased, compared to control IgG-treated ones. Therefore, we propose that the induction of tolerance and the prevention of diabetes incidence in NOD female mice induced by the GAD-IgG fusion construct may require CD4 + regulatory T cells, and the possible mediation of TGF-b.