This paper introduces a model which incorporates fetal thymus organ culture (FTOC) from NOD mice to replicate thymic development of diabetogenic T cells. NOD fetal pancreas organ culture (FPOC) co-cultured with 13-16 day NOD FTOC for an additional 14-21 days produced less insulin than FPOC cultured alone. Insulin production from the FTOC of non-diabetic strains C57BL/6 and BALB/c was not inhibited by co-culture with FTOC from their syngeneic counterparts. Sections of the NOD co-cultures showed peri-islet infiltration with lymphocytes. Insulin reduction by FTOC/FP co-culture was prevented by co-culture of the NOD FT with FT from immunologically incompetent C.B-17 SCID/SCID mice. Co-culture of NOD FP with NOD FT prior to the development of T cells prevented generation of diabetogenic FTOC. Thus, early exposure of NOD T cell precursors to the thymic stromal elements of C.B-17 SCID/SCID FT or to islet antigens can negatively select for diabetogenic T cells or activate immune-regulatory cells that can suppress diabetogenic T cell activity. The addition of blocking F(ab')(2) fragments of anti-CD3 epsilon monoclonal antibody to NOD FTOC/FP co-cultures prevented insulin reduction, implicating a role for TcR-mediated recognition in this ''in vitro IDDM'' model. The addition of activating whole anti-CD3 epsilon caused the complete ablation of insulin production in FTOC/FP co-cultures from all strains tested. Transfer of unprimed syngeneic FTOC cells to prediabetic NOD mice prevented the onset of IDDM while transfer of islet-cell primed FTOC/FP cells slightly increased disease incidence. These data suggest that while diabetogenic T cells are present in the FT, they are normally suppressed, even after organ culture. However, these cells can induce the destruction of islet cells, in vitro and in vivo, if they are appropriately activated with pancreatic tissue. (C) 1997 Academic Press Limited.