Recent advances in our understanding of the pathogenesis of type 1 diabetes have occurred in all steps of the disease. This review outlines the pathogenic mechanisms utilized by the immune system to mediate destruction of the pancreatic beta-cells. The autoimmune response against beta-cells appears to begin in the pancreatic lymph node where T cells, which have escaped negative selection in the thymus, first meet beta-cell antigens presented by dendritic cells. Proinsulin is an important antigen in early diabetes. T cells migrate to the islets via the circulation and establish insulitis initially around the islets. T cells within insulitis are specific for islet antigens rather than bystanders. Pathogenic CD4+ T cells may recognize peptides from proinsulin which are produced locally within the islet. CD8+ T cells differentiate into effector T cells in islets and then kill beta-cells, primarily via the perforin-granzyme pathway. Cytokines do not appear to be important cytotoxic molecules in vivo. Maturation of the immune response within the islet is now understood to contribute to diabetes, and highlights the islet as both driver and target of the disease. The majority of our knowledge of these pathogenic processes is derived from the NOD mouse model, although some processes are mirrored in the human disease. However, more work is required to translate the data from the NOD mouse to our understanding of human diabetes pathogenesis. New technology, especially MHC tetramers and modern imaging, will enhance our understanding of the pathogenic mechanisms.