Infiltration of pancreatic islets by immune cells, termed insulitis, increases progressively once it begins and leads to clinical type 1 diabetes. But even after diagnosis some islets remain unaffected and infiltration is patchy rather than uniform. Traffic of autoreactive T cells into the pancreas is likely to contribute to insulitis progression but it could also depend on T-cell proliferation within islets. This study utilizes transgenic NOD mice to assess the relative contributions of these two mechanisms. Progression of insulitis in NOD8.3 TCR transgenic mice was mildly reduced by inhibition of T-cell migration with the drug FTY720. In FTY720-treated mice, reduced beta cell MHC class I expression prevented progression of insulitis both within affected islets and to previously unaffected islets. CTL proliferation was significantly reduced in islets with reduced or absent beta cell expression of MHC class I protein. This indicates that intra-islet proliferation, apparently dependent on beta cell antigen presentation, in addition to recruitment, is a significant factor in progression of insulitis.