The concept that naive CD4⁺ and CD8⁺ T cells require co‐stimulatory signals for activation and proliferation is well documented. Less clear is the need for co‐stimulation during the effector phase of the T cell response. Here we examined the influence of B7‐1 (CD80) during the effector phase of an autoimmune response to pancreatic islets using transgenic mouse lines which expressed B7‐1 in either all or only some of their β cells ( “confluent” or “patchy” RIP‐B7‐1 mice). Transgenic expression of B7‐1 in normal mouse islets that co‐expressed the pro‐inflammatory cytokine, IL‐2, resulted in early spontaneous autoimmunity. Islets with IL‐2 and “confluent” B7‐1 expression were destroyed whereas islets with IL‐2 and “patchy” B7‐1 expression showed selective killing of the B7‐1⁺ β cells. Islet‐reactive T cells, circulating in the RIP‐B7‐1/IL‐2 mice, rejected syngeneic islet grafts, but only if these expressed B7‐1. Introduction of the B7‐1 transgene into the nonobese diabetic (NOD) genetic background likewise resulted in early spontaneous autoimmunity, but splenocytes from the diabetic animals could only transfer diabetes to NOD scid recipients that expressed B7‐1 on their β cells. In both these transgenic models, therefore, islet destruction required continuous B7‐1 expression by target β cells. Thus, although the normal repertoire contains T cells with potential islet reactivity, these T cells remain harmless because parenchymal cells like the β cell cannot normally express B7‐1. Our results also have implications for tumor immunotherapy in that the ability of T cells to kill poorly immunogenic targets may be dependent upon B7‐1 expression by the target cell itself.