Studies suggest that Gr1(+)CD11b(+) cells have immunoregulatory function, and these cells may play an important role in autoimmune diseases. In this study, we investigated the regulatory role of Gr1(+)CD11b(+) cells in protecting against type 1 diabetes in NOD mice. In this study, we showed that temporary B cell depletion induced the expansion of Gr1(+)CD11b(+) cells. Gr1(+)CD11b(+) cells not only directly suppress diabetogenic T cell function but also can induce regulatory T cell differentiation in a TGF-β-dependent manner. Furthermore, we found that Gr1(+)CD11b(+) cells could suppress diabetogenic CD4 and CD8 T cell function in an IL-10-, NO-, and cell contact-dependent manner. Interestingly, single anti-Gr1 mAb treatment can also induce a transient expansion of Gr1(+)CD11b(+) cells that delayed diabetes development in NOD mice. Our data suggest that Gr1(+)CD11b(+) cells contribute to the establishment of immune tolerance to pancreatic islet autoimmunity. Manipulation of Gr1(+)CD11b(+) cells could be considered as a novel immunotherapy for the prevention of type 1 diabetes.