Growing insight into the pathogenesis of type 1 diabetes and numerous studies in preclinical models highlight the potential of antigen-specific approaches to restore tolerance efficiently and safely. Oral administration of protein antigens is a preferred method for tolerance induction, but degradation during gastrointestinal passage can impede such protein-based therapies, reducing their efficacy and making them cost-ineffective. To overcome these limitations, we generated a tolerogenic bacterial delivery technology based on live Lactococcus lactis (L. lactis) bacteria for controlled secretion of the type 1 diabetes autoantigen GAD65370-575 and the anti-inflammatory cytokine IL10 in the gut. In combination with short-course low-dose anti-CD3, this treatment stabilized insulitis, preserved functional β-cell mass and restored normoglycemia in recent-onset nonobese diabetic (NOD) mice, even when hyperglycemia was severe at diagnosis. Combination therapy did not eliminate pathogenic T effectors, but increased the presence of CD4+Foxp3+CD25+ regulatory T cells (Tregs) with suppressive action in vitro as well as in vivo. These preclinical data indicate a great therapeutic potential of orally-administered autoantigen-secreting L. lactis for tolerance induction in type 1 diabetes.