NKT cell activation by α-galactosylceramide (α-GalCer) inhibits autoimmune diabetes in NOD mice, in part by inducing recruitment to pancreatic lymph nodes (PLNs) of mature dendritic cells (DCs) with disease-protective effects. However, how activated NKT cells promote DC maturation, and what downstream effect this has on diabetogenic T cells was unknown. Activated NKT cells were found to produce a soluble factor (s) inducing DC maturation. Initially, there was a preferential accumulation of mature DCs in the PLNs of α-GalCer-treated NOD mice, followed by a substantial increase in T cells. Adoptive transfer of a diabetogenic CD8 T cell population (AI4) induced a high rate of disease (75%) in PBS-treated NOD recipients, but not in those pretreated with α-GalCer (8%). Significantly, more AI4 T cells accumulated in PLNs of α-GalCer than PBS-treated recipients, while no differences were found in mesenteric lymph nodes from each group. Compared with those in mesenteric lymph nodes, AI4 T cells entering PLNs underwent greater levels of apoptosis, and the survivors became functionally anergic. NKT cell activation enhanced this process. Hence, activated NKT cells elicit diabetes protection in NOD mice by producing a soluble factor (s) that induces DC maturation and accumulation in PLNs, where they subsequently recruit and tolerize pathogenic T cells.