Expression of the SV40 T antigen (Tag) in pancreatic β-cells in transgenic mice has been shown to induce β-cell tumorigenesis. We generated transgenic mice in which Tag expression is inducible and reversible by the tet-on gene regulation system. These mice develop β-cell tumors only when treated with the inducer doxycycline (dox). Tag expression in vivo is reversible upon dox withdrawal. As a result, β-cell proliferation is greatly reduced, indicating that genetic changes, which may occur in the transformed cells, do not allow Tag-independent proliferation. Induction of Tag expression after immune recognition of self-antigens has been established triggers an autoimmune response against β-cells, as evidenced by insulitis. Shut-off of Tag expression results in elimination of insulitis, suggesting that this process depends on continuous expression of the target antigen. In addition, the reversibility of autoimmunity suggests that β-cell damage caused by the anti-Tag immune response does not elicit secondary responses to other newly exposed β-cell antigens, which would have persisted after Tag elimination. β-Cell proliferation in this model is accompanied by cell apoptosis. Apoptosis persisted for several weeks in the islets after dox removal. In close to 40% of the mice analyzed, this process reduced the islet size back to normal, suggesting the existence of a homeostatic mechanism that maintains β-cell mass within the normal range.