OBJECTIVE: Beta-cell regeneration is a fundamental but elusive goal for type 1 diabetes research. Our objective is to review newer human and animal studies of beta-cell destruction and regeneration and consider the implications for treatment of type 1 diabetes. RESEARCH DESIGN AND METHODS: Recent human and animal studies of beta-cell destruction and regeneration in type 1 diabetes are reviewed. RESULTS: The loss of beta-cells that characterizes type 1 diabetes reflects the net effects of destruction and regeneration. These processes have been examined in the nonobese diabetic (NOD) mouse; uncertainty remains about beta-cell dynamics in humans. Islet inflammation stimulates beta-cell replication that produces new insulin-positive cells. The regenerative process may tide the loss of overall beta-cell function, but it also may enhance the autoimmune attack on beta-cells by providing new epitopes. The highest rates of beta-cell replication are at the time of diagnosis of diabetes in NOD mice, and if autoimmunity and islet inflammation are arrested, new beta-cells are formed. However, the majority of beta-cells after treatment with immune modulators such as anti-CD3 monoclonal antibody, and most likely during the "honeymoon" in human disease, are recovered beta-cells that had been degranulated but present at the time of diagnosis of diabetes. CONCLUSIONS: Residual beta-cells play a significant role for the design of therapeutic trials: they not only may respond to combination therapies that include stimulants of metabolic function but are also the potential source of new beta-cells.