The immunoregulatory function of NKT cells is crucial for prevention of autoimmunity. The prototypical NKT cell Ag alpha-galactosylceramide is not present in mammalian cells, and little is known about the mechanism responsible for NKT cell recruitment and activation. Up-regulation of CD1d, the NKT cell restriction molecule, expressed on mononuclear cells infiltrating the target organ, could represent the physiological trigger for NKT cells to self-contain T cell immunity and to prevent autoimmune disease. Recognition of CD1d, either by itself or bound to self-ligands (selfCD1d), could drive NKT cells toward an immunoregulatory phenotype. Hence, ineffective NKT cell-mediated immunoregulation in autoimmune-prone individuals including nonobese diabetic (NOD) mice could be related to defective signals that regulate CD1d expression at time and site of autoimmunity. To test this hypothesis, we transgenically overexpressed CD1d molecules under the control of the insulin promoter within the pancreatic islets of NOD mice (insCD1d). Recognition of overexpressed CD1d molecules rescued NKT cell immunoregulatory function and prevented autoimmune diabetes in insCD1d transgenic NOD mice. Protection from diabetes was associated with a biased IL-4-secreting cytokine phenotype of NKT cells and alteration of the cytokine microenvironment in the pancreatic lymph nodes of transgenic mice. The net effect was a reduced development of the autoimmune T cell repertoire. Our findings suggest that up-regulation of CD1d expression during inflammation is critical to maintain T cell homeostasis and to prevent autoimmunity.