Although transgenic mice expressing murine B7-1 (mCD80) on their pancreatic β cells under the rat insulin-1 promoter (RIP-mCD80+ mice) rarely develop spontaneous β cell destruction and diabetes, we have previously reported the transgene-dependent induction of profound insulitis and lethal diabetes following multiple low dose injections of the β cell toxin streptozotocin (MLDS) in RIP-mCD80+ mice. Here, we have further characterized this MLDS-induced diabetes model using the RIP-mCD80+ mice and now demonstrate that disease is critically dependent on T cell signaling via CD28. Thus, although naive RIP-mCD80+ and nontransgenic littermates have comparable gross β cell mass, and immediately following MLDS induction the mice display similar degrees of insulitis and decrements in the β cell mass, only transgenic mice continued to destroy their β cells and develop insulin-dependent diabetes mellitus. Strikingly, MLDS-induced diabetes was completely prevented in CD28-deficient mice (RIP-mCD80+CD28−/−) due to abrogation of leukocytes infiltrating their pancreatic islets. We further characterized MLDS-induced diabetes in the RIP-mCD80+ mice by demonstrating that the MLDS-induced lymphocytic islet infiltrate contained a substantial frequency of autoantigen-specific, IFN-γ-secreting, CD8+ T cells. We conclude that MLDS-induced β cell destruction and subsequent insulin-dependent diabetes mellitus in RIP-mCD80+ mice is T cell-mediated as it involves both Ag-specific recognition of self-target molecules in the inflamed pancreatic islet (signal 1) and is CD28 costimulation dependent (signal 2).