An immunogenic peptide (p277) from the 60-kDa heat shock protein (hsp60) arrested beta-cell destruction in non-obese diabetic mice. A randomized, double-blind, phase Ib/II clinical trial of DiaPep277 peptide treatment was performed in recent-onset type 1 diabetes patients with remaining insulin production. We studied the immunological efficacy of this peptide therapy and correlated this with clinical outcome. Forty-eight C-peptide-positive patients were assigned subcutaneous injections of 0·2, 1·0 or 2·5 mg p277 (n = 12 per dosage) at entry, and 1, 6 and 12 months, or four placebo injections (n = 12). T cell autoimmunity to hsp60, DiaPep277, glutamic acid decarboxylase and tetanus toxoid (recall response control) were assayed by proliferation and cytokine secretion assays (enzyme-linked immunospot) at regular intervals until 18 months after the first injection. All treated patients at each dosage of peptide demonstrated an altered immune response to DiaPep277, while the majority of placebo-treated patients remained non-responsive to treatment (P = 0·00001), indicating a 100% efficacy of immunization. Cytokine production in response to therapy was dominated by interleukin (IL)-10. IL-10 production before therapy and decreasing autoantigen-specific T cell proliferation were associated with beta-cell preservation. Third-party control immune responses were unaffected by therapy. No potentially adverse immunological side effects were noted. DiaPep277 is immunogenic in type 1 diabetic subjects and has immune modulating properties. Immunological monitoring distinguished therapy from placebo treatment and could determine immunological efficacy. Declining or temporary proliferative responses to peptide DiaPep277 treatment may serve as an immunological biomarker for clinical efficacy.