Diabetics need to control blood sugar levels
The Spanish researchers found the genetically modified mice completely recovered from the disease despite having an excess of the sugar glucose in their blood.
The scientists from the Universitat Autonoma de Barcelona (UAB) hope to develop a genetic therapy based on this discovery, which will help eventually to develop a cure for humans.
Type 1 diabetes - also known as insulin-dependent or immune-mediated diabetes - is a disease that destroys the beta cells in the pancreas that produce the hormone insulin.
Insulin is needed to control blood sugar levels - without insulin death is inevitable.
The research team led by Fatima Bosch, professor in the Department of Biochemistry and Molecular Biology at the UAB, studied the effects of a protein called IGF-I on the mice.
The mice were genetically modified so that their beta cells produced the protein.
The protein not only stimulated the creation of more beta cells, it also reduced the rate at which they were killed off.
The researchers are hopeful they can transfer the technique for use in humans, but add that this discovery could take some time.
Mairi Benson, of Diabetes UK, said they were excited by the breakthrough but warned it could be some time before sufferers see any benefits.
"The news of a potential Type 1 diabetes cure at the Universitat Autonoma de Barcelona is extremely interesting," she said.
"However, the research has only been carried out on laboratory mice at present, and many more years of work is necessary before it will be known whether the therapy could benefit humans with Type 1 diabetes."
The research was published in the Journal of Clinical Investigation.