TNF has been implicated in the pathogenesis of type 1 diabetes. When administered early in life, TNF accelerates and increases diabetes in NOD mice. However, when administered late, TNF decreases diabetes incidence and delays onset. TNFR1-deficient NOD mice were fully protected from diabetes and only showed mild peri-insulitis. To further dissect how TNFR1 deficiency affects type 1 diabetes, these mice were crossed to β cell-specific, highly diabetogenic TCR transgenic IA g7–restricted NOD4. 1 mice and Kd-restricted NOD8. 3 mice. TNFR1-deficient NOD4. 1 and NOD8. 3 mice were protected from diabetes and had significantly less insulitis compared with wild type NOD4. 1 and NOD8. 3 controls. Diabetic NOD4. 1 mice rejected TNFR1-deficient islet grafts as efficiently as control islets, confirming that TNFR1 signaling is not directly required for β cell destruction. Flow cytometric analysis showed a significant increase in the number of CD4+ CD25+ Foxp3+ T regulatory cells in TNFR1-deficient mice. TNFR1-deficient T regulatory cells were functionally better at suppressing effector cells than were wild type T regulatory cells both in vitro and in vivo. This study suggests that blocking TNF signaling may be beneficial in increasing the function of T regulatory cells and suppression of type 1 diabetes.