The NOD mouse is an invaluable model for the study of autoimmune diabetes. Furthermore, although less appreciated, NOD mice are susceptible to other autoimmune diseases that can be differentially manifested by altering the balance of T cell costimulatory pathways. In this study, we show that constitutively expressing B7-1 on B cells (NOD-B7-1B-transgenic mice) resulted in reduced insulitis and completely protected NOD mice from developing diabetes. Furthermore, B7-1 expression led to a dramatic reduction of the B cell compartment due to a selective deletion of follicular B cells in the spleen, whereas marginal zone B cells were largely unaffected. B cell depletion was dependent on B cell specificity, mediated by CD8+ T cells, and occurred exclusively in the autoimmune-prone NOD background. Our results suggest that B cell deletion was a consequence of the specific activation of autoreactive T cells directed at peripheral self Ags presented by maturing B cells that expressed B7-1 costimulatory molecules. This study underscores the importance of B7 costimulatory molecules in controlling the amplitude and target of autoimmunity in genetically prone individuals and has important implications in the use of costimulatory pathway antagonists in the treatment of human autoimmune diseases.