Cure of type 1 diabetes (T1D) by immune intervention at disease onset depends on the restoration of insulin secretion by endogenous β-cells. However, little is known about the potential of β-cell mass and function to recover after autoimmune attack ablation. Using a longitudinal in vivo imaging approach, we show how functional status and mass of β-cells adapt in response to the onset and remission of T1D. We demonstrate that infiltration reduces β-cell mass prior to onset and, together with emerging hyperglycemia, affects β-cell function. After immune intervention, persisting hyperglycemia prevents functional recovery but promotes β-cell mass increase in mouse islets. When blood glucose levels return to normoglycemia β-cell mass expansion stops, and subsequently glucose tolerance recovers in combination with β-cell function. Similar to mouse islets, human islets exhibit cell exhaustion and recovery in response to transient hyperglycemia. However, the effect of hyperglycemia on human islet mass increase is minor and transient. Our data demonstrate a major role of functional exhaustion and recovery of β-cells during T1D onset and remission. Therefore, these findings support early intervention therapy for individuals with T1D.