Nonobese diabetic (NOD) mice are genetically programmed to spontaneously develop type one diabetes (T1D). Multiple Insulin dependent diabetes (Idd) genetic loci have been identified but their functional effects are mostly poorly understood. TnfsfR9, expressing the protein product CD137, is a strong candidate gene in the Idd9.3 locus, and NOD.B10 Idd9.3 mice are significantly protected from type one diabetes (T1D). We previously showed that nonobese diabetic (NOD) mice have a deficiency in the numbers of CD137pos T regulatory cells, that CD137pos Tregs are the source of soluble CD137 (sCD137), and that NOD mice have low serum levels of sCD137. To test the hypothesis that correcting low levels of sCD137 could affect the disease, we constructed a lentiviral vector producing recombinant sCD137; this physiologic sCD137 is glycosylated and exists primarily as a dimer. NOD mice treated with the recombinant sCD137 are protected from developing T1D. Insulitis is significantly decreased, but not eliminated in the sCD137 treated mice, however insulin producing pancreatic beta cells are preserved despite residual insulitis. To begin to understand the protective immune mechanisms of sCD137, we tested sCD137 in vitro. It was previously suggested that sCD137 simply blocked the interaction between CD137 (on T cells) and CD137 ligand (on antigen presenting cells (APCs)). Here however, we use an APC independent assay and demonstrate that sCD137 can actively suppress highly purified CD4 T cells in a CD137L dependent fashion. These results support the hypothesis that sCD137 acts in a negative feedback loop to actively suppress over-zealous immune responses, and that it can be used clinically to suppress autoimmunity. sCD137 is an important Treg derived natural immunosuppressive molecule that regulates effector T cells to avert diabetes in vivo.