Lymphocyte activation gene-3 (LAG-3; CD223) is a CD4 homolog that is required for maximal regulatory T cell function and for the control of CD4(+) and CD8(+) T cell homeostasis. Lag3(-)(/)(-) NOD mice developed substantially accelerated diabetes with 100% incidence. Adoptive transfer experiments revealed that LAG-3 was primarily responsible for limiting the pathogenic potential of CD4(+) T cells and, to a lesser extent, CD8(+) T cells. Lag3(-)(/)(-) mice exhibited accelerated, invasive insulitis, corresponding to increased CD4(+) and CD8(+) T cell islet infiltration and intraislet proliferation. The frequencies of islet Ag-reactive chromogranin A-specific CD4(+) T cells and islet specific glucose-6-phosphatase-specific CD8(+) T cells were significantly increased in the islets of Lag3(-)(/)(-) mice, suggesting an early expansion of pathogenic clones that is normally restrained by LAG-3. We conclude that LAG-3 is necessary for regulating CD4(+) and CD8(+) T cell function during autoimmune diabetes, and thus may contribute to limiting autoimmunity in disease-prone environments