Type-1 diabetes (T1D) is an autoimmune disease targeting insulin-producing beta cells, resulting in dependence on exogenous insulin. To date, significant efforts have been invested to develop immune-modulatory therapies for T1D treatment. Previously, IL-2 immunotherapy was demonstrated to prevent and reverse T1D at onset in the non-obese diabetic (NOD) mouse model, revealing potential as a therapy in early disease stage in humans. In the NOD model, IL-2 deficiency contributes to a loss of regulatory T cell function. This deficiency can be augmented with IL-2 or antibody bound to IL-2 (Ab/IL-2) therapy, resulting in regulatory T cell expansion and potentiation. However, an understanding of the mechanism by which reconstituted regulatory T cell function allows for reversal of diabetes after onset is not clearly understood. Here, we describe that Ab/IL-2 immunotherapy treatment, given at the time of diabetes onset in NOD mice, not only correlated with reversal of diabetes and expansion of Treg cells, but also demonstrated the ability to significantly increase beta cell proliferation. Proliferation appeared specific to Ab/IL-2 immunotherapy, as anti-CD3 therapy did not have a similar effect. Furthermore, to assess the effect of Ab/IL-2 immunotherapy well after the development of diabetes, we tested the effect of delaying treatment for 4 weeks after diabetes onset, when beta cells were virtually absent. At this late stage after diabetes onset, Ab/IL-2 treatment was not sufficient to reverse hyperglycemia. However, it did promote survival in the absence of exogenous insulin. Proliferation of beta cells could not account for this improvement as few beta cells remained. Rather, abnormal insulin and glucagon dual-expressing cells were the only insulin-expressing cells observed in islets from mice with established disease. Thus, these data suggest that in diabetic NOD mice, beta cells have an innate capacity for regeneration both early and late in disease, which is revealed through IL-2 immunotherapy.