Type 1 diabetes mellitus is an autoimmune condition characterized by insulin deficiency resulting from loss of function of beta cells in the pancreas, leading to hyperglycemia and associated long-term systemic complications and even death. Immunotherapy demonstrates beta cell function-preserving potential; however, its impact on C-peptide levels, a definitive biomarker of beta cell function, and endogenous insulin secretion remain unclear. A systematic review of various immunotherapeutic interventions is hence needed for a comprehensive assessment of their effectiveness as well as identifying research gaps and influencing future research and clinical decisions. An extensive literature search was done in PubMed, Scopus, and Cochrane Library databases using precise keywords and filters to identify relevant studies. Three independent reviewers assessed eligibility according to predetermined eligibility criteria, and data was extracted. The Cochrane risk of bias assessment tool (RoB 2.0) was used to evaluate the quality and validity of the included studies. A senior reviewer resolved discrepancies and differences of opinion between independent reviewers. A total of 11 studies were included, with 1464 study participants. Both Phase II and III trials were included. Within the included studies, four studies assessed the anti-CD3 monoclonal antibody otelixizumab as an intervention. Another anti-CD3 monoclonal antibody, teplizumab, was assessed as an intervention in four studies, whereas two studies assessed the anti-CD20 antibody rituximab and one study assessed abatacept as its interventional drug. Otelixizumab demonstrated benefits at higher doses but was associated with adverse effects like Ebstein-Barr virus reactivation and cytomegalovirus infection, while at lower doses it failed to show a significant difference in C-peptide levels or glycosylated hemoglobin (HbA1c). Teplizumab, on the other hand, showed promise in reducing C-peptide loss and exogenous insulin requirements and was associated with adverse events such as rash, lymphopenia, urinary tract infection, and cytokine release syndrome. However, these reactions were only associated with therapy initiation, and they subsided on their own. Rituximab improved C-peptide responses, and abatacept therapy demonstrated reduced loss of C-peptide, improved C-peptide levels, and lowered HbA1c. Teplizumab, rituximab, otelixizumab, and abatacept show potential for preserving beta cell function by reducing C-peptide loss in patients with type I diabetes mellitus. However, careful monitoring of adverse reactions, particularly viral infections and cytokine release syndrome, is necessary for the safe implementation of these therapies.