Autologous hematopoietic stem cell transplantation (HSCT) has recently been performed as a novel strategy to treat patients with new-onset type 1 diabetes (T1D). However, the mechanism of autologous HSCT-induced remission of diabetes remains unknown. In order to help clarify the mechanism of remission-induction following autologous HSCT in patients with T1D, mice treated with multiple low doses of streptozotocin to induce diabetes were used as both donors (n=20) and recipients (n=20). Compared to streptozocin-treated mice not receiving transplantation, syngeneic bone marrow transplantation (syn-BMT) from a streptozocin-treated diabetic donor, if applied during new-onset T1D (day 10 after diabetes onset), can reverse hyperglycemia without relapse (P<0.001), maintain normal blood insulin levels (P<0.001), and preserve islet cell mass. Compared to diabetic mice not undergoing HSCT, syn-BMT, results in restoration of Tregs in spleens (P<0.01), increased Foxp3 mRNA expression (P<0.01) and increased Foxp3 protein expression (P<0.05). This diabetic-remission-inducing effect occurred in mice receiving bone marrow from either streptozocin-treated diabetic or non-diabetic normal donors. We conclude that autologous HSCT remission of diabetes is more than transient immune suppression, and is capable of prolonged remission-induction via regeneration of CD4+CD25+FoxP3+ Tregs.