B cells play a critical role in the pathogenesis of autoimmune diabetes. To investigate the mechanisms by which B cell depletion therapy attenuates islet β cell loss and particularly to examine the effect of B cells on both diabetogenic and regulatory Ag-specific T cells, we generated a transgenic BDC2.5NOD mouse expressing human CD20 on B cells. This allowed us to deplete B cells for defined time periods and investigate the effect of B cell depletion on Ag-specific BDC2.5 T cells. We depleted B cells with anti-human CD20 Ab using a multiple injection protocol. We studied two time points, before and after B cell regeneration, to examine the effect on BDC2.5 T cell phenotype and functions that included antigenic response, cytokine profile, diabetogenicity, and suppressive function of regulatory T (T(reg)) cells. We found unexpectedly that B cell depletion induced transient aggressive behavior in BDC2.5 diabetogenic T cells and reduction in T(reg) cell number and function during the depletion period. However, after B cell reconstitution, we found that more regenerated B cells, particularly in the CD1d(-) fraction, expressed immune regulatory function. Our results suggest that the regenerated B cells are likely to be responsible for the therapeutic effect after B cell depletion. Our preclinical study also provides direct evidence that B cells regulate both pathogenic and T(reg) cell function, and this knowledge could explain the increased T cell responses to islet Ag after rituximab therapy in diabetic patients in a recent report and will be useful in design of future clinical protocols.