Islet transplantation is a cure for type 1 diabetes, but its potential is limited by the need for constant immunosuppression. One solution to this problem is the induction of transplantation tolerance mediated by T regulatory cells. T regulatory type 1 (Tr1) cells are characterized by their production of high levels of interleukin (IL)-10, which is crucial for their differentiation and suppressive function. We investigated the effects of IL-10 administered in combination with rapamycin on the induction of Tr1 cells that could mediate a state of tolerance in diabetic mice after pancreatic islet transplantation. The efficacy of this treatment was compared with IL-10 alone and standard immunosuppression. Stable long-term tolerance that was not reversible by alloantigen rechallenge was achieved only in mice treated with rapamycin plus IL-10. Tr1 cells that produced high levels of IL-10 and suppressed T-cell proliferation were isolated from splenocytes of rapamycin plus IL-10-treated mice after treatment withdrawal. In rapamycin plus IL-10-treated mice, endogenous IL-10 mediated an active state of tolerance, as was observed when the blockade of IL-10 activity rapidly induced graft rejection >100 days after transplantation. CD4(+) T-cells from rapamycin plus IL-10-treated mice transferred antigen-specific tolerance in mice that received new transplants. Thus rapamycin plus IL-10 not only prevented allograft rejection but also induced Tr1 cells that mediated stable antigen-specific, long-term tolerance in vivo.