The mechanism by which tumor necrosis factor-α (TNF) differentially modulates type I diabetes mellitus in the nonobese diabetic (NOD) mouse is not well understood. CD4⁺CD25⁺ T cells have been implicated as mediators of self-tolerance. We show (i) NOD mice have a relative deficiency of CD4⁺CD25⁺ T cells in thymus and spleen; (ii) administration of TNF or anti-TNF to NOD mice can modulate levels of this population consistent with their observed differential age-dependent effects on diabetes in the NOD mouse; (iii) CD4⁺CD25⁺ T cells from NOD mice treated neonatally with TNF show compromised effector function in a transfer system, whereas those treated neonatally with anti-TNF show no alteration in ability to prevent diabetes; and (iv) repeated injection of CD4⁺CD25⁺ T cells into neonatal NOD mice delays diabetes onset for as long as supplementation occurred. These data suggest that alterations in the number and function of CD4⁺CD25⁺ T cells may be one mechanism by which TNF and anti-TNF modulate type I diabetes mellitus in NOD mice.