Xanthine derivative, pentoxifylline (PTX), has been recently shown to exert a protective effects in certain animal models of autoimmunity, including diabetes in NOD mice. In the present study, the immunomodulatory potential of PTX was investigated in autoimmune diabetes induced by multiple low doses of streptozotocin (MLD-SZ) in genetically susceptible CBA/H mice (tested with 40 mg SZ/kg b.w. for 5 days) and DA rats (tested with 20 mg/kg b.w. for 5 days). In both species, 2 – 3 weeks following the MLD-SZ treatment, sustained hyperglycemia developed, as an outcome of inflammatory reaction with endothelial cell activation and accumulation of mononuclear cells. Although there was no evidence of typical insulitis in early disease development (day 10), in both rats and mice, macrophages, CD4+ and CD8+ cells were present in the islets of Langerhans as diffuse mononuclear infiltrates with the expression of IFN-γ and inducible NO synthase (iNOS). Administration of PTX (200 mg/kg/day for 10 days) in combination with MLD-SZ reduced insulitis and the production of mediators tested, and prevented the development of hyperglycemia. These results suggest that beneficial effects of PTX involve down-regulation of local proinflammatory cytokine-mediated NO synthase pathway. They also demonstrate that in addition to ameliorating spontaneous autoimmunity in NOD mice, PTX may be effective in downregulating an inflammatory autoimmune process triggered in susceptible host by an external agents, such as streptozotocin.