The application of anti-CD3 F(ab')(2) monoclonal antibodies has recently been expanded to treat established autoimmune diseases, including type 1 diabetes. However, the mechanism underlying their effect remains largely unclear. We report that short-phase administration of anti-CD3 F(ab')(2) antibodies efficiently allowed 80% of new-onset, nonobese diabetic (NOD) mice to significantly regain both normoglycemia and pancreatic beta cell-specific autoantigen (ie, glutamic acid decarboxylase and insulin) tolerance, with both effects lasting more than 40 weeks. The responsible mechanism appears to involve the induction and maintenance of a population of immunoregulatory CD1d-restricted natural killer T (NKT) cells, which were marked by an enhanced Th2 response and secretion of elevated levels of interleukin-10. In vivo neutralization of interleukin-4 and/or interleukin-10 bioactivity abrogated this anti-CD3-mediated effect. Importantly, when the cotransfer of NKT cells from the livers of anti-CD3-treated mice and splenocytes from untreated, acutely diabetic NOD mice was performed in NOD-severe combined immunodeficient mice, the NKT cells were sufficient to either delay or prevent the onset of diabetes compared with controls where only splenocytes were introduced. These data suggest that CD1d-restricted NKT cells may play a critical role in anti-CD3 antibody-induced diabetes remission and the restoration of immune tolerance.