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CD3-specific monoclonal antibody (mAb) treats autoimmune disease in animal models and has shown promise in clinical trials of type 1 diabetes. Whereas intravenous administration of CD3-specific mAb acts primarily by transient depletion of activated effector T cells, oral CD3-specific mAb acts primarily by the induction Tregs. We investigated whether oral CD3-specific mAb inhibits disease in non obese diabetic (NOD) mice that spontaneously develop autoimmune diabetes, closely resembling human type 1 diabetes. We found that oral CD3-specific mAb treatment delayed onset and reduced incidence of diabetes in NOD mice, inducing changes in both effector and regulatory T cell compartments. The therapeutic effect was associated with decreased T cell proliferation, decreased IFNγ and IL-17 production, and increased TGF-β and IL-10 production in vitro. In vivo transfer experiments demonstrated that oral CD3-specific mAb decreased diabetogenicity of effector T cells and increased the function of regulatory T cells. Oral OKT3, a monoclonal antibody specific for human CD3 had equivalent effects in transgenic NOD mice expressing the human CD3 epsilon chain which serves as a preclinical model for testing human CD3-specific mAb. These results suggest that oral CD3-specific mAb has the potential for treating autoimmune diabetes in humans.