(S,R)-3-Phenyl-4,5-dihydro-5-isoxasole acetic acid (VGX-1027) is an isoxazole compound that exhibits various immunomodulatory properties. The capacity of VGX-1027 to prevent interleukin (IL)-1beta plus interferon-gamma-induced pancreatic islet death in vitro prompted us to evaluate its effects on the development of autoimmune diabetes in preclinical models of human type 1 diabetes mellitus (T1D). Administration of VGX-1027 to NOD mice with spontaneous or accelerated forms of diabetes induced either by injection of cyclophosphamide or by transfer of spleen cells from acutely diabetic syngeneic donors markedly reduced the cumulative incidence of diabetes and insulitis. In addition, VGX-1027 given either i.p. or p.o. to CBA/H mice made diabetic with multiple low doses of streptozotocin successfully counteracted the development of destructive insulitis and hyperglycemia. The animals receiving VGX-1027 exhibited reduced production of the proinflammatory mediators tumor necrosis factor-alpha, IL-1beta, macrophage migration inhibitory factor, and inducible nitric-oxide synthase-mediated nitric oxide generation in both pancreatic islets and peripheral compartments. These results indicate that VGX-1027 probably exerts its antidiabetogenic effects by limiting cytokine-mediated immunoinflammatory events, leading to inflammation and destruction of pancreatic islets. VGX-1027 seems worthy of being considered as a candidate drug in the development of new therapeutic strategies for the prevention and early treatment of T1D.