OBJECTIVE The gut environment modulates the pathogenesis of type 1 diabetes (T1D), but how it affects autoimmunity toward pancreatic β-cells, a self-tissue located outside the intestine, is still unclear. In the small intestine, lamina propria dendritic cells (LPDCs) induce peripheral differentiation of FoxP3+ regulatory T (Treg) cells. We tested the hypothesis that the intestinal milieu impinges on human T1D by affecting differentiation of FoxP3+ Treg cells. RESEARCH DESIGN AND METHODS We collected duodenal biopsies of 10 T1D patients, 16 healthy subjects, and 20 celiac individuals and performed a fluorescent-activated cell sorter analysis to measure percentages of various immune cell subsets, including CD4+ and CD8+ T cells, NK cells, γδ T cells, CD103+CD11c+ LPDCs, and CD4+CD25+FoxP3+CD127− Treg cells. In parallel, we assessed the tolerogenic function (i.e., capacity to induce differentiation of FoxP3+ Treg cells) by LPDCs of T1D patients and control subjects. RESULTS Our analysis revealed a significant reduction in the percentage of intestinal CD4+CD25+FoxP3+CD127− Treg cells in T1D patients compared with healthy subjects (P = 0.03) and celiac individuals (P = 0.003). In addition, we found that LPDCs from T1D patients completely lacked their tolerogenic function; they were unable to convert CD4+CD25− T cells into CD4+CD25+FoxP3+CD127− Treg cells. CONCLUSIONS Our data indicate that T1D patients have a reduced number of intestinal FoxP3+ Treg cells as a result of their defective differentiation in the gut. These findings suggest that intestinal immune regulation is not only calibrated to tolerate commensal bacteria and food components but also is instrumental in maintaining immune tolerance toward pancreatic β-cells and preventing T1D.