The ligand-activated transcription factor, aryl hydrocarbon receptor (AHR), is a novel inducer of adaptive Tregs. 2,3,7,8-Tetrachlorodibenzo-p-dioxin (TCDD), the most potent AHR ligand, induces adaptive CD4CD25 Tregs during an acute graft-versus-host (GvH) response and prevents the generation of allospecific cytotoxic T lymphocytes. TCDD also suppresses the induction of experimental autoimmune encephalitis in association with an expanded population of Foxp3 Tregs. In this study, we show that chronic treatment of NOD mice with TCDD potently suppresses the development of autoimmune Type 1 diabetes in parallel with greatly reduced pancreatic islet insulitis and an expanded population of CD4CD25Foxp3 cells in the pancreatic lymph nodes. When treatment with TCDD was terminated after 15 weeks (23 weeks of age), mice developed diabetes over the next 8 weeks in association with lower numbers of Tregs and decreased activation of AHR. Analysis of the expression levels of several genes associated with inflammation, T-cell activation and/or Treg function in pancreatic lymph node cells failed to reveal any differences associated with TCDD treatment. Taken together, the data suggest that AHR activation by TCDD-like ligands may represent a novel avenue for treatment of immune-mediated diseases.