Successful transplantation requires the prevention of allograft rejection and, in the case of transplantation to treat autoimmune disease, the suppression of autoimmune responses. The standard immunosuppressive treatment regimen given to patients with autoimmune type 1 diabetes who have received an islet transplant results in the loss of T cells. In many other situations, the immune system responds to T cell loss through cytokine-dependant homeostatic proliferation of any remaining T cells. Here we show that T cell loss after islet transplantation in patients with autoimmune type 1 diabetes was associated with both increased serum concentrations of IL-7 and IL-15 and in vivo proliferation of memory CD45RO⁺ T cells, highly enriched in autoreactive glutamic acid decarboxylase 65–specific T cell clones. Immunosuppression with FK506 and rapamycin after transplantation resulted in a chronic homeostatic expansion of T cells, which acquired effector function after immunosuppression was removed. In contrast, the cytostatic drug mycophenolate mofetil efficiently blocked homeostatic T cell expansion. We propose that the increased production of cytokines that induce homeostatic expansion could contribute to recurrent autoimmunity in transplanted patients with autoimmune disease and that therapy that prevents the expansion of autoreactive T cells will improve the outcome of islet transplantation.