One striking feature of spontaneous autoimmune diabetes is the prototypic formation of lymphoid follicular structures within the pancreas. Lymphotoxin (LT) has been shown to play an important role in the formation of lymphoid follicles in the spleen. To explore the potential role of LT-mediated microenvironment in the pathogenesis of insulin-dependent diabetes mellitus (IDDM), an LTβ receptor–immunoglobulin fusion protein (LTβR–Ig) was administered to nonobese diabetic mice. Early treatment with LTβR–Ig prevented insulitis and IDDM, suggesting that LT plays a critical role in the insulitis development. LTβR–Ig treatment at a late stage of the disease also dramatically reversed insulitis and prevented diabetes. Moreover, LTβR–Ig treatment prevented the development of IDDM by diabetogenic T cells in an adoptive transfer model. Thus, LTβR–Ig can disassemble the well established lymphoid microenvironment in the islets, which is required for the development and progression of IDDM.