Background: Insulin-dependent Type 1 diabetes (T1D) is a devastating autoimmune disease that destroys beta cells within the pancreatic islets and afflicts over 10 million people worldwide. These patients face life-long risks for blindness, cardiovascular and renal diseases, and complications of insulin treatment. New therapies that protect islets from autoimmune destruction and allow continuing insulin production are needed. Increasing evidence regarding the pathomechanism of T1D indicates that islets are destroyed by the relentless attack by autoreactive immune cells evolving from an aberrant action of the innate, in addition to adaptive, immune system that produces islet-toxic cytokines, chemokines, and other effectors of islet inflammation. We tested the hypothesis that targeting nuclear import of stressresponsive transcription factors evoked by agonist-stimulated innate and adaptive immunity receptors would protect islets from autoimmune destruction. Principal Findings: Here we show that a first-in-class inhibitor of nuclear import, cSN50 peptide, affords in vivo islet protection following a 2-day course of intense treatment in NOD mice, which resulted in a diabetes-free state for one year without apparent toxicity. This nuclear import inhibitor precipitously reduces the accumulation of islet-destructive autoreactive lymphocytes while enhancing activation-induced cell death of T and B lymphocytes derived from autoimmune diabetes-prone, non-obese diabetic (NOD) mice that develop T1D. Moreover, in this widely used model of human T1D we noted attenuation of pro-inflammatory cytokine and chemokine production in immune cells. Conclusions: These results indicate that a novel form of immunotherapy that targets nuclear import can arrest inflammation-driven destruction of insulin-producing beta cells at the site of autoimmune attack within pancreatic islets during the progression of T1D.