Type 1 diabetes in both humans and nonobese diabetic (NOD) mice results from autoreactive T cell destruction of insulin-producing β cells. Cure of type 1 diabetes may require both reversal of autoimmunity and regeneration of β cells. Induction of chimerism via allogeneic hematopoietic cell transplantation has been shown to reestablish tolerance in both prediabetic and diabetic NOD mice. However, it is unclear whether this therapy augments β cell regeneration. Furthermore, this procedure usually requires total body irradiation conditioning of recipients. The toxicity of total body irradiation conditioning and potential for graft-versus-host disease (GVHD) limit the application of allogeneic hematopoietic cell transplantation for treating type 1 diabetes. Here we report that injection of donor bone marrow and CD4⁺ T cell-depleted spleen cells induced chimerism without causing GVHD in overtly diabetic NOD mice conditioned with anti-CD3/CD8 and that induction of chimerism in new-onset diabetic NOD mice led to elimination of insulitis, regeneration of host β cells, and reversal of hyperglycemia. Therefore, this radiation-free GVHD preventive approach for induction of chimerism may represent a viable means for reversing type 1 diabetes.