Background: Type 1 diabetes (T1D) is a T cell-mediated autoimmune disease that causes a deficit of pancreatic islet beta cells. The complexities of overcoming autoimmunity in T1D have contributed to the challenges the research community faces when devising successful treatments with conventional immune therapies. Overcoming autoimmune T cell memory represents one of the key hurdles. Methods: In this open-label, phase 1/phase 2 study, Caucasian T1D patients (N = 15) received two treatments with the Stem Cell Educator (SCE) therapy, an approach that uses human multipotent cord blood-derived multipotent stemcells (CB-SCs). SCE therapy involves a closed-loop system that briefly treats the patient's lymphocytes with CB-SCs in vitro and returns the "educated" lymphocytes (but not the CB-SCs) into the patient's blood circulation. This study is registered with ClinicalTrials.gov, NCT01350219. Findings: Clinical data demonstrated that SCE therapy was well tolerated in all subjects. The percentage of naive CD4(+) T cells was significantly increased at 26 weeks and maintained through the final follow-up at 56 weeks. The percentage of CD4(+) central memory T cells (TCM) was markedly and constantly increased at 18 weeks. Both CD4(+) effector memory T cells (T-EM) and CD8(+) T-EM cells were considerably decreased at 18 weeks and 26 weeks respectively. Additional clinical data demonstrated the modulation of C-C chemokine receptor 7 (CCR7) expressions on naive T, T-CM, and T-EM cells. Following two treatments with SCE therapy, islet beta-cell function was improved and maintained in individualswith residual beta-cell function, but not in those without residual beta-cell function. Interpretation: Current clinical data demonstrated the safety and efficacy of SCE therapy in immune modulation. SCE therapy provides lasting reversal of autoimmune memory that could improve islet beta-cell function in Caucasian subjects. Funding: Obra Social "La Caixa", Instituto de Salud Carlos III, Red de Investigacion Renal, European Union FEDER Funds, Principado de Asturias, FICYT, and Hackensack University Medical Center Foundation. (C) 2015 The Authors. Published by Elsevier B.V.