Type 1 diabetes results from autoimmune destruction of the insulin-producing pancreatic β-cells. Evidence from our laboratory and others has suggested that the IDDM2 locus determines diabetes susceptibility by modulating levels of insulin expression in the thymus: the diabetes-protective class III alleles at a repeat polymorphism upstream of the insulin gene are associated with higher levels than the predisposing class I. To directly demonstrate the effect of thymic insulin expression levels on insulin-specific autoreactive T-cell selection, we have established a mouse model in which there is graded thymic insulin deficiency in linear correlation with insulin gene copy numbers, while pancreatic insulin remains unaltered. We showed that mice expressing low thymic insulin levels present detectable peripheral reactivity to insulin, whereas mice with normal levels show no significant response. We conclude that thymic insulin levels play a pivotal role in insulin-specific T-cell self-tolerance, a relation that provides an explanation for the mechanism by which the IDDM2 locus predisposes to or protects from diabetes.