Membrane type-1 matrix metalloproteinase (MT1-MMP) shedding of the signaling and adhesion CD44 receptor plays a significant role in stimulating cancer cells locomotion. Similarly, and unexpectedly, MT1-MMP-dependent shedding of CD44 plays an equally significant role in regulating the adhesion to the pancreatic vasculature and also in the concomitant transendothelial migration and intra-islet homing of the diabetogenic, cytotoxic, T cells. Inactivation of the T cell MT1-MMP functionality by clinically tested, synthetic inhibitors leads to an extended immobilization of the T killer cells on the pancreatic vasculature and, subsequently, to immunosuppression because of the cessation of the T cell transmigration and homing. Injections of insulin jointly with an MT1-MMP inhibitor stimulated the regeneration of functional, insulin-producing, beta-cells in acutely diseased non-obese diabetic (NOD) mice. After insulin injections were suspended and inhibitor injections continued, diabetic NOD mice maintained mild hyperglycemia and did not require further insulin injections for survival. Overall, these data provide a substantive mechanistic rationale for clinical trials of the inhibitors of MT1-MMP in human type 1 diabetes.