Posttranslational modification (PTM) of self-proteins has been shown to elicit clinically relevant immune responses in rheumatoid arthritis and celiac disease. Accumulating evidence suggests that recognition of modified self-proteins may also be important in type 1 diabetes. Our objective was to identify posttranslationally modified GAD65 peptides, which are recognized by subjects with type 1 diabetes, and to assess their disease relevance. We show that citrullination and transglutamination of peptides can enhance their binding to DRB1*04:01, a diabetes-susceptible HLA allele. These and corresponding modifications to amino acids at T-cell contact positions modulated the recognition of multiple GAD65 peptides by self-reactive T cells. Using class II tetramers, we verified that memory T cells specific for these modified epitopes were detectable directly ex vivo in the peripheral blood of subjects with type 1 diabetes at significantly higher frequencies than healthy controls. Furthermore, T cells that recognize these modified epitopes were either less responsive or nonresponsive to their unmodified counterparts. Our findings suggest that PTM contributes to the progression of autoimmune diabetes by eliciting T-cell responses to new epitope specificities that are present primarily in the periphery, thereby circumventing tolerance mechanisms.