Biologic treatment of T1D typically results in transient stabilization of C-peptide levels (a surrogate for endogenous insulin secretion) in some patients, followed by progression at the same rate as in untreated control groups. Here, we used integrated systems biology and flow cytometry approaches with clinical trial blood samples to elucidate pathways associated with C-peptide stabilization in T1D subjects treated with the anti-CD3 monoclonal antibody teplizumab. We identified a population of CD8 T cells that accumulated in subjects with the best response to treatment (responders) and showed that these cells phenotypically resembled exhausted T cells by expressing high levels of the transcription factor EOMES, effector molecules, and multiple inhibitory receptors (IRs), including TIGIT and KLRG1. These cells expanded after treatment, with levels peaking after 3-6 months. To functionally characterize these exhausted-like T cells, we isolated memory CD8 TIGIT+KLRG1+ T cells from responders and showed that they exhibited expanded TCR clonotypes, indicative of prior in vivo expansion; recognized a broad-based spectrum expressed of environmental and auto-antigens; and were hypo-proliferative during polyclonal stimulation, increasing expression of IR genes and decreasing cell cycle genes. Triggering these cells with a recombinant ligand for TIGIT during polyclonal stimulation further downregulated their activation, demonstrating their exhausted phenotype was not terminal. These findings identify and functionally characterize a partially exhausted cell type associated with response to teplizumab therapy and suggest that pathways regulating T cell exhaustion may play a role in successful immune interventions for T1D.