Kilham rat virus (KRV) causes autoimmune diabetes in diabetes-resistant BioBreeding (DR-BB) rats; however, the mechanism by which KRV induces autoimmune diabetes without the direct infection of beta cells is not well understood. We first asked whether molecular mimicry, such as a common epitope between a KRV-specific peptide and a beta cell autoantigen, is involved in the initiation of KRV-induced autoimmune diabetes in DR-BB rats. We found that KRV peptide-specific T cells generated in DR-BB rats infected with recombinant vaccinia virus expressing KRV-specific structural and nonstructural proteins could not induce diabetes, indicating that molecular mimicry is not the mechanism by which KRV induces autoimmune diabetes. Alternatively, we asked whether KRV infection of DR-BB rats could disrupt the finely tuned immune balance and activate autoreactive T cells that are cytotoxic to beta cells, resulting in T cell-mediated autoimmune diabetes. We found that both Th1-like CD45RC+CD4+ and cytotoxic CD8+ T cells were up-regulated, whereas Th2-like CD45RC-CD4+ T cells were down-regulated, and that isolated and activated CD45RC+CD4+ and CD8+ T cells from KRV-infected DR-BB rats induced autoimmune diabetes in young diabetes-prone BioBreeding (DP-BB) rats. We conclude that KRV-induced autoimmune diabetes in DR-BB rats is not due to molecular mimicry, but is due to a breakdown of the finely tuned immune balance of Th1-like CD45RC+CD4+ and Th2-like CD45RC-CD4+ T cells, resulting in the selective activation of beta cell-cytotoxic effector T cells.