Prevention of autoimmunity requires the elimination of self-reactive T cells during their development in the thymus and maturation in the periphery. Transgenic NOD mice that overexpress islet-specific glucose 6 phosphatase catalytic subunit-related protein (IGRP) in antigen-presenting cells (NOD-IGRP mice) have no IGRP-specific T cells. To study the relative contribution of central and peripheral tolerance mechanisms to deletion of antigen-specific T cells, we crossed NOD-IGRP mice to highly diabetogenic IGRP206-214 T-cell receptor transgenic mice (NOD8.3 mice) and studied the frequency and function of IGRP-specific T cells in the thymus and periphery. Peripheral tolerance was extremely efficient and completely protected NOD-IGRP/NOD8.3 mice from diabetes. Peripheral tolerance was characterized by activation of T cells in peripheral lymphoid tissue where IGRP was expressed followed by activation-induced cell death. Thymectomy showed that thymic output of IGRP-specific transgenic T cells compensated for peripheral deletion to maintain peripheral T-cell numbers. Central tolerance was undetectable until 10 weeks and complete by 15 weeks. These in vivo data indicate that peripheral tolerance alone can protect NOD8.3 mice from autoimmune diabetes and that profound changes in T-cell repertoire can follow subtle changes in thymic antigen presentation.