The study investigates the roles of programmed death 1 (PD-1) ligands, PD-L1 and PD-L2, in regulating T cell activation and tolerance. PD-L1 and PD-L2 have overlapping functions in inhibiting interleukin-2 and interferon-γ production during T cell activation, but PD-L1 plays a unique and critical role in controlling self-reactive T cells in the pancreas. Mice lacking both PD-L1 and PD-L2 (PD-L1/PD-L2−/−) develop a rapid onset of autoimmune diabetes, with increased insulitis and effector T cell responses in the pancreatic lymph nodes. The expression of PD-L1 on islet cells protects against immunopathology after transplantation. PD-L1 inhibits pathogenic self-reactive CD4+ T cell-mediated tissue destruction and effector cytokine production. These findings suggest that PD-L1 expression on parenchymal cells is essential for protecting against autoimmune diabetes and mediating tissue tolerance.The study investigates the roles of programmed death 1 (PD-1) ligands, PD-L1 and PD-L2, in regulating T cell activation and tolerance. PD-L1 and PD-L2 have overlapping functions in inhibiting interleukin-2 and interferon-γ production during T cell activation, but PD-L1 plays a unique and critical role in controlling self-reactive T cells in the pancreas. Mice lacking both PD-L1 and PD-L2 (PD-L1/PD-L2−/−) develop a rapid onset of autoimmune diabetes, with increased insulitis and effector T cell responses in the pancreatic lymph nodes. The expression of PD-L1 on islet cells protects against immunopathology after transplantation. PD-L1 inhibits pathogenic self-reactive CD4+ T cell-mediated tissue destruction and effector cytokine production. These findings suggest that PD-L1 expression on parenchymal cells is essential for protecting against autoimmune diabetes and mediating tissue tolerance.