Type 1 diabetes (T1D) is an autoimmune disease resulting from T cell-mediated destruction of insulin-producing β cells, and viral infections can prevent the onset of disease. Invariant natural killer T cells (iNKT cells) exert a regulatory role in T1D by inhibiting autoimmune T cell responses. As iNKT cell-plasmacytoid dendritic cell (pDC) cooperation controls viral replication in the pancreatic islets, we investigated whether this cellular cross talk could interfere with T1D development during viral infection. Using both virus-induced and spontaneous mouse models of T1D, we show that upon viral infection, iNKT cells induce TGF-β-producing pDCs in the pancreatic lymph nodes (LNs). These tolerogenic pDCs convert naive anti-islet T cells into Foxp3(+) CD4(+) regulatory T cells (T reg cells) in pancreatic LNs. T reg cells are then recruited into the pancreatic islets where they produce TGF-β, which dampens the activity of viral- and islet-specific CD8(+) T cells, thereby preventing T1D development in both T1D models. These findings reveal a crucial cooperation between iNKT cells, pDCs, and T reg cells for prevention of T1D by viral infection.