Type 1 diabetes (T1DM) is an autoimmune condition in which the immune system attacks and destroys insulin-producing beta cells in the pancreas leading to hyperglycemia. Vasoactive intestinal peptide (VIP) manifests insulinotropic and anti-inflammatory properties, which are useful for the treatment of diabetes. Because of its limited half-life due to DPP-4-mediated degradation, constant infusions or multiple injections are needed to observe any therapeutic benefit. Since gene therapy has the potential to treat genetic diseases, an HIV-based lentiviral vector carrying VIP gene (LentiVIP) was generated to provide a stable VIP gene expression in vivo. The therapeutic efficacy of LentiVIP was tested in a multiple low-dose STZ-induced animal model of T1DM. LentiVIP delivery into diabetic animals reduced hyperglycemia, improved glucose tolerance, and prevented weight loss. Also, a decrease in serum CRP levels, and serum oxidant capacity, but an increase in antioxidant capacity were observed in LentiVIP-treated animals. Restoration of islet cell mass was correlated with an increase in pancreatic beta-cell proliferation. These beneficial results suggest the therapeutic effect of LentiVIP is due to the repression of diabetes-induced inflammation, its insulinotropic properties, and VIP-induced beta-cell proliferation.