Nonobese diabetic (NOD) and NOD-DRα transgenic (tg) mice, expressing Aαd:Aβg7 and Aαd:Aβg7 plus DRα:Eβg7 class II molecules, respectively, both develop insulin-dependent diabetes mellitus (IDDM), whereas NOD-Eα tg mice expressing Aαd:Aβg7 plus Eα:Eβg7 are protected. We show that IL-12 administration induces rapid IDDM onset in NOD-DRα but fails to provoke insulitis and diabetes in NOD-Eα tg mice. Nevertheless, T cells from IL-12-treated NOD-Eα tg mice secrete IFN-γ and transfer IDDM to NOD-SCID and NOD-Eα-SCID recipients, demonstrating the presence of peripheral diabetogenic Th1 cells in the protected mice. Surprisingly, regulatory cells were undetectable. Moreover, Eα:Eβg7 could substitute for DRα:Eβg7 in Ag presentation, arguing against mechanisms of protection involving capture of diabetogenic I-Ag7-restricted epitopes by Eα:Eβg7molecules. Interestingly, the expression of naturally processed epitopes derived from DRα- and Eα-chains bound to I-Ag7 is different in the two strains of tg mice, and the difference is enhanced by IL-12 administration. I-Ag7 molecules from both NOD-DRα and NOD-Eα tg mice present the conserved DRα/Eα 52-68 sequence, at high and low levels, respectively. In addition, only IDDM-resistant NOD-Eα tg mice possess APCs bearing Eα65-77/I-Ag7 complexes, which tolerize the specific T cells. This is associated with the selective inhibition of the response to insulinoma-associated protein 2 (IA-2), an autoantigen in IDDM. Our results support protective mechanisms based on I-Ag7 blockade by peptides unique to the Eα-chain, such as Eα65-77 and/or tolerance of diabetogenic T cells cross-reactive with Eα-peptide/I-Ag7 complexes.