Cytokines have been shown to play an important role in regulating tolerance to islet Ags and provoking destructive islet lesions. However, data from a number of experimental systems have been conflicting, and the role of cytokines produced by T lymphocytes at various stages of diabetes has not been clearly defined. We have studied the production of cytokines in the pancreas during the development of autoimmune diabetes induced in mice by administration of (5) low doses of streptozotocin (STZ) (MDSDM). Diabetes in this model is T lymphocyte dependent. We used techniques of semiquantitative PCR to identify and quantitate cytokines that are produced. We have found that IL-2, IL-4, TNF-alpha, and IFN-gamma are expressed by the time the fourth dose of STZ is given. In the same pancreas, all of these cytokines (including IL-4) may be found. However, expression of IFN-gamma, but not IL-4, was limited to intrapancreatic lymphocytes and was not detectable at extrapancreatic lymphoid sites. Moreover, mAbs against IFN-gamma, but not against IL-4 or IL-2, prevent hyperglycemia and insulitis in MDSDM, suggesting that IFN-gamma regulates development of disease. Cells in the pancreases of nondiabetic mice treated with anti-IFN-gamma mAb and STZ show enhanced expression of IL-4, but the prevention of disease is due to blockade of the IFN-gamma itself, and not due to secretion of IL-4, because systemic administration of IL-4 does not prevent MDSDM. Thus, our findings indicate that cytokines produced by Th1 (or T cytolytic 1) and Th2 (or T cytolytic 2) cells are found in the pancreases of mice developing autoimmune diabetes. IFN-gamma is responsible for progression to diabetes, and its production is limited to lymphocytes only at that site.