Type 1 diabetes results from autoimmune destruction of the insulin-producing beta-cells of pancreatic islets, of which the capacity for self-replication in the adult is too limited to restore following extensive tissue injury. Tissue inhibitor of metalloproteinase (TIMP)-1 inhibits matrix metalloproteinase activity and regulates proliferation and apoptosis of a variety of cells types, depending on the context. Here, we show that overexpression of human TIMP-1 in pancreatic beta-cells of transgenic mice counteracts the cytotoxicity and insulitis induced by multiple low-dose streptozotocin (MLDS). Nontransgenic mice developed severe hyperglycemia, hypoinsulinemia, and insulitis 2 weeks after streptozotocin administration and died within 17 weeks. However, MLDS-treated transgenic mice gradually normalized the metabolic parameters and survived. beta-Cell mass increased in parallel as a result of enhancement of beta-cell replication. Thus, our results have demonstrated for the first time that overexpression of TIMP-1 in beta-cells enhances the replication of pancreatic islets beta-cells and counteracts type 1 diabetes, indicating that the TIMP-1 gene may be a potential target to prevent, or even reverse, type 1 diabetes.