Activated macrophages are the first mononuclear cells to migrate to the pancreas of DP-BB rats at the initiation of insulitis. These cells produce an excess of NO, which has been implicated as a mediator of both beta-cell damage and inhibition of T-cell proliferation in this rat strain. Genetic studies have shown that the impaired proliferative response of T-cells segregates with one of the diabetes-susceptibility genes of the DP-BB rat, lyp, which is responsible for a peripheral T-lymphopenia. This observation suggests that the dysregulated expression of inducible NO synthase (iNOS) is under the control of lyp itself or a gene in linkage disequilibrium with lyp. Using two models of hemopoietic chimeras--DP-BB rats reconstituted with isocongenic T-cells and irradiated (WF x DP-BB)F1 animals reconstituted with bone marrow of both parental strains--we demonstrated that the production of NO by DP-BB macrophages is normal when these cells originate from a non-T-lymphopenic environment. Consequently, these macrophages no longer inhibit the stimulation of DNA synthesis in activated T-cells. Macrophages of young WF rats were found to produce high levels of NO, which inhibited T-cell proliferation in vitro. This observation strongly suggests that upregulation of NO synthesis in DP-BB macrophages represents the abnormal persistence of a phenomenon restricted to the first few weeks of life in non-diabetes-prone rats. Taken together, these results demonstrate that the elevated production of NO by DP-BB macrophages results from the lyp mutation and represents a crucial mechanism through which T-lymphopenia contributes to the development of diabetes.