T cell tolerance to peripheral antigens is believed to result mainly from the inability of parenchymal cells to present antigens in an immunogenic form due to the lack of expression of T cell costimulator. We found, however, that tranagenic expression of the T cell costimulator 87-l on the islets of Langerhans is not sufficient to abolish the in vivo tolerance to islets antigen. Here, we present evidence indicating that the level of major histocompatibllity complex (MHC) antigen expressed by islet cells plays a critical role. Mice coexpressing the 87-l transgene and high levels of the class II MHC antigen IE on the islets develop an autoimmune destruction of the fl cells of the pancreas. By contrast, expression of the IE molecule by islets, in the absence of T cell costlmulator, leads to specific tolerance of these autoreactlve T cells that cannot be reversed by costimulation with B7-1.