Several studies in the non-obese diabetic (NOD) mouse model have demonstrated that enhancement of immune regulation by induction of regulatory T cells secreting IL-10 is a key mechanism in the maintenance of self-tolerance and protection from T1D. However, relatively little has been done to analyze the presence or function of regulatory B cell subsets in models of diabetes. The current study was initiated to determine whether early stages of diabetes progression in NOD mice could be attributed to deficiencies in regulatory B lymphocytes. Splenic cell populations were phenotypically and functionally compared between 6 to 12 week-old NOD mice and age-matched mice from several non-diabetic strains. Young NOD mice had significantly fewer B lymphocytes in their spleens, but had equivalent numbers of T cells compared to mice from other strains, including Balb/c, C57Bl/6, and DBA mice. Analysis of B cell subsets using markers of follicular, marginal zone, and transitional B cells revealed that while NOD mice were deficient in both transitional and follicular populations, the marginal zone B cell compartment was relatively increased as a percent of the whole. The number of regulatory B cells identified as either CD19+CD5+CD1d+ (B10) or IgMhiCD21hiCD23+ T2-MZP B cell subsets was equivalent among the different strains. However, stimulation of purified B cells from NOD mice with CD40 ligand and IL-5 demonstrated a remarkably increased capacity for proliferation and production of IL-10 as compared to B cells from other strains. Adoptive transfer of diabetes from diabetic NOD mice into NOD.scid mice was significantly delayed after cotransferring CD19+ B cells from young NOD mice compared to controls. These data suggest a novel suppressive function of the regulatory B cell population in NOD mice. This raises the possibility that expanding the regulatory B cell compartment may be used therapeutically to protect human subjects at risk for T1D.