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T he mechanisms that regulate pancreatic β cell mass are poorly understood. While autoimmune and pharmacological destruction of insulin-producing β cells is often irreversible, adult β cell mass does fluctuate in response to physiological cues including pregnancy and insulin resistance. This plasticity points to the possibility of harnessing the regenerative capacity of the β cell to treat diabetes. We developed a transgenic mouse model to study the dynamics of β cell regeneration from a diabetic state. Following doxycycline administration, transgenic mice expressed diphtheria toxin in β cells, resulting in apoptosis of 70%–80% of β cells, destruction of islet architecture, and diabetes. Withdrawal of doxycycline resulted in a spontaneous normalization of blood glucose levels and islet architecture and a significant regeneration of β cell mass with no apparent toxicity of transient hyperglycemia. Lineage tracing analysis indicated that enhanced proliferation of surviving β cells played the major role in regeneration. Surprisingly, treatment with Sirolimus and Tacrolimus, immunosuppressants used in the Edmonton protocol for human islet transplantation, inhibited β cell regeneration and prevented the normalization of glucose homeostasis. These results suggest that regenerative therapy for type 1 diabetes may be achieved if autoimmunity is halted using regeneration-compatible drugs.