Insulin-producing cells (IPCs) generated by our established protocol have reached the non-clinical 'proof of concept' stage. Our strategy for their clinical application is the autotransplantation of IPCs into patients with type 1 diabetes mellitus (T1DM). In this context, the autoimmunity that characterized T1DM is important, rather than allorejection. We aimed to determine how these IPCs respond to T1DM autoimmunity. IPCs were generated from the subcutaneous fat tissue of non-obese diabetic (NOD) mice using our protocol. IPCs derived from NOD mice were transplanted under the kidney capsules of NOD mice at the onset of diabetes and the subsequent changes in blood glucose concentration were characterized. Blood glucose decreased within 30 days of transplantation, but increased again after 40-60 days in three of four recipient NOD mice. In tissue samples, the numbers of CD4+ and CD8+ T cells were significantly higher 60 days after transplantation than 30 days after transplantation. In conclusion, IPCs significantly ameliorate the diabetes of mice in the short term, but are damaged by autoimmunity in the longer term, as evidenced by local T cells accumulation. This study provides new insights into potential stem cell therapies for T1DM.