Aims/hypothesis. This study examined whether locally expressed CTLA4-Ig can suppress the accelerated islet allograft rejection that is induced by donor-specific transfusion.Methods. CTLA4-Ig-transfected or parental MIN6 cells were transplanted subcutaneously into the right flank of streptozotocin-induced diabetic C3H/Hej mice with or without donor-specific transfusion. For donor-specific transfusion, spleen cells from C57BL/6 mice were injected i.v. at the time of transplantation. In other experiments, CTLA4-Ig-transfected and parental MIN6 cells were transplanted separately into each flank, together with donor-specific transfusion. Rejection was defined as a blood glucose concentration of more than 300 mg/dl in two consecutive measurements, and graft survival was confirmed by hyperglycaemia after the grafts were removed. The effect of an anti-CTLA4 antibody on the survival of CTLA4-Ig-transfected MIN6 cells was also examined.Results. In 7 of 12 donor-specific transfusion sensitised mice, CTLA4-Ig-transfected MIN6 cells remained viable 20 days after grafting, whereas all parental MIN6 cells (n = 10) were rejected promptly, within 14 days. The prolonged allograft survival was observed even in the absence of detectable levels of serum CTLA4-Ig, while the surviving allografts continued to produce CTLA4-Ig in situ. This protection was abrogated by an anti-CTLA4 antibody, but not by a control antibody. Furthermore, six animals that maintained normoglycaemia after the separate transplantation of parental and CTLA4-Ig-transfected MIN6 cells into each flank all showed abrupt hyperglycaemia after the CTLA4-Ig/MIN6 graft was removed, suggesting that this protection operated locally. Conclusion/interpretation. A beta-cell line genetically engineered to secrete CTLA4-Ig can protect a graft locally from the alloimmune response induced by donorspecific transfusion. [Diabetologia (2002) The insulin-secreting islets comprise only a small fraction of the whole pancreas (~1%); therefore, the transplantation of purified islets rather than the whole pancreas seems to be a reasonable approach to control metabolic dysfunction in patients with Type I (insulindependent) diabetes mellitus. Although the survival of vascularised pancreas allografts at one year has significantly improved following the introduction of T cellspecific immunosuppressants such as cyclosporin and FK506 [1], the survival of pancreatic islet grafts under the same immunosuppressive regimen is still under 30% one year after transplantation [2]. However, a current study reports that seven consecutive patients attained sustained insulin independence after pancreatic islet transplantation [3]. All these recipients were