Genetically-controlled defects in the development and function of antigen presenting cells may explain why NOD mice exhibit an impaired ability to induce tolerance and/or activate immunoregulatory T cells. These defects provide understanding for why diabetogenesis in NOD mice is so sensitive to immunomodulatory changes mediated through the environment. Although the unique MHC haplotype of NOD mice is clearly a major contributor to diabetes susceptibility, evidence for a complex interaction between MHC loci and many other polygenetic factors is reviewed.