Although transgenic mice expressing murine B7-1 (mCD80) on their pancreatic beta cells under the rat insulin-1 promoter (RIP-mCD80(+) mice) rarely develop spontaneous beta cell destruction and diabetes, we have previously reported the transgene-dependent induction of profound insulitis and lethal diabetes following multiple low dose injections of the beta cell toxin streptozotocin (MLDS) in RIP-mCD80(+) mice. Here, we have further characterized this MLDS-induced diabetes model using the RIP-mCD80(+) mice and now demonstrate that disease is critically dependent on T cell signaling via CD28. Thus, although naive RIP-mCD80(+) and nontransgenic littermates have comparable gross beta cell mass, and immediately following MLDS induction the mice display similar degrees of insulitis and decrements in the beta cell mass, only transgenic mice continued to destroy their beta cells and develop insulin-dependent diabetes mellitus. Strikingly, MLDS-induced diabetes was completely prevented in CD28-deficient mice (RIP-mCD80(+)CD28(-/-)) due to abrogation of leukocytes infiltrating their pancreatic islets. We further characterized MLDS-induced diabetes in the RIP-mCD80(+) mice by demonstrating that the MLDS-induced lymphocytic islet infiltrate contained a substantial frequency of autoantigen-specific, IFN-gamma-secreting, CD8(+) T cells. We conclude that MLDS-induced beta cell destruction and subsequent insulin-dependent diabetes mellitus in RIP-mCD80(+) mice is T cell-mediated as it involves both Ag-specific recognition of self-target molecules in the inflamed pancreatic islet (signal 1) and is CD28 costimulation dependent (signal 2).