Type 1 diabetes is a chronic autoimmune disease in which destruction of pancreatic beta cells causes life-threatening metabolic dysregulation. Numerous approaches are envisioned for new therapies, but limitations of current clinical outcome measures are significant disincentives to development efforts. C-peptide, a direct byproduct of proinsulin processing, is a quantitative biomarker of beta cell function that is not cleared by the liver and can be measured in the peripheral blood. Studies of quantitative measures of beta cell function have established a predictive relationship between stimulated C-peptide as a measure of beta cell function and clinical benefits. C-peptide levels at diagnosis are often high enough to afford glycemic control benefits associated with protection from end-organ complications of diabetes, and even lower levels offer protection from severe hypoglycemia in type 1 diabetes, as observed in large prospective cohort studies and interventional trials of islet transplantation. These observations support consideration of C-peptide not just as a biomarker of beta cell function, but also as a specific, sensitive, feasible, and clinically meaningful outcome defining beta cell preservation or restoration for clinical trials of disease-modifying therapies. Regulatory acceptance of C-peptide as a validated surrogate for demonstration of efficacy would greatly facilitate development of disease-modifying therapies for type 1 diabetes.