NKG2D is implicated in autoimmune diabetes. However, the role of this receptor in diabetes pathogenesis is unclear owing to conflicting results with studies involving global inhibition of NKG2D signaling. We found that NKG2D and its ligands are present in human pancreata, with expression of NKG2D and its ligands increased in the islets of patients with type 1 diabetes. To directly assess the role of NKG2D in the pancreas, we generated NOD mice that express an NKG2D ligand in β-islet cells. Diabetes was reduced in these mice. The reduction corresponded with a decrease in the effector to central memory CD8+ T-cell ratio. Further, NKG2D signaling during in vitro activation of both mouse and human CD8+ T cells resulted in an increased number of central memory CD8+ T cells and diabetes protection by central memory CD8+ T cells in vivo. Taken together, these studies demonstrate that there is a protective role for central memory CD8+ T cells in autoimmune diabetes and that this protection is enhanced with NKG2D signaling. These findings stress the importance of anatomical location when determining the role NKG2D signaling plays, as well as when developing therapeutic strategies targeting this pathway, in type 1 diabetes development.