In type 1 diabetes mellitus (T1DM), also known as autoimmune diabetes, the pathogenic destruction of the insulin-producing pancreatic beta-cells is under the control of and influenced by distinct subsets of T lymphocytes. To identify the critical genes expressed by autoimmune T cells, antigen presenting cells, and pancreatic beta-cells during the evolution of T1DM in the nonobese diabetic (NOD) mouse, and the genetically-altered NOD mouse (BDC/N), we used functional genomics. Microarray analysis revealed increased transcripts of genes encoding inflammatory cytokines, particularly interleukin (IL)-17, and islet cell regenerating genes, Reg3alpha, Reg3beta, and Reg3gamma. Our data indicate that progression to insulitis was connected to marked changes in islet antigen expression, beta-cell differentiation, and T cell activation and signaling, all associated with tumor necrosis factor-alpha and IL-6 expression. Overt diabetes saw a clear shift in cytokine, chemokine, and T cell differentiation factor expression, consistent with a focused Th1 response, as well as a significant upregulation in genes associated with cellular adhesion, homing, and apoptosis. Importantly, the temporal pattern of expression of key verified genes suggested that T1DM develops in a relapsing/remitting as opposed to a continuous fashion, with insulitis linked to hypoxia-regulated gene control and diabetes with C/EBP and Nkx2 gene control.