Introduction Interleukin 10 (IL-10) is an immunoregulatory cytokine necessary to prevent autoimmune disease development. In addition to its inhibitory influence on antigen-presenting cells, IL-10 has been shown recently to act also through modulation of effector T cell and memory T cell (Tmem) function and optimization of regulatory T cell (Treg) suppressive activity. Mice with Tmem- or Treg-specific depletion of the IL-10 receptor (IL-10R) develop fatal autoimmune diseases. Although these observations provide a putative mechanism for loss of self tolerance, no correlation exists with pathological conditions that alter IL-10 signaling in T cells. We tested the hypothesis that exposure of T cells to a chronic inflammatory environment would alter their response to IL-10 and aimed to identify the mediator(s) and mechanism(s) involved. Methods IL-10 signals through the JAK1-STAT3 pathway. We therefore assessed the integrity of the pathway by flow cytometric quantification of phospho-STAT3 in response to IL-10, or IL-6 as control. We investigated the influence of prolonged exposure to the supernatant of mouse maturing dendritic cells (DC) exposed to LPS (MATSup) and other factors (as indicated below), on IL-10 pathway integrity in Tmem and Treg. Results Following 36–48 h incubation in MATSup, a block in phosphorylation of STAT3 in response to IL-10, but not in response to IL-6, was evident. This IL-10-specific unresponsiveness was not associated with reduction in cell surface IL-10R expression (either alpha or beta chains), nor with an alteration in STAT3 cytoplasmic availability. Additionally, this inhibition was not induced by exposure to IL-6 or IL-1. Instead, incubation with IFN-β impaired IL-10 signaling in both Tmem and Treg. This inhibitory effect was not blocked by AKT inhibition, suggesting a role for Jak/STAT or other IFN-β-initiated signaling pathways. Moreover, inhibition of IL-10 signaling was not established by short-term (overnight) exposure to IFN-β, confirming the need for prolonged exposure and delineating a complex mechanism for actuation of such an alteration. This prompted us to investigate T cells in an autoimmune model characterized by chronic production of type-I interferons (TI-IFN). In NOD mice, a widely used model of human type-1 diabetes (T1D), the spontaneous development of diabetes is linked to high levels of TI-IFN in pancreatic lymph nodes (PNC-LN) starting around 3 weeks of age. We analyzed the response to IL-10 of T cells from spleen, PNC-LN, other LNs, and pancreata of NOD mice and discovered that around 4 weeks of age, Tmem and Treg in PNC-LN and pancreata displayed suppressed responses to IL-10, while the same T cell subsets remained unaltered in all other tissues. This phenotype was not present in non-autoimmune prone C57BL/6 mice. Conclusion Overall, these data reveal the existence of a new molecular mechanism that controls the early development of autoimmunity and the pathogenesis of T1D. In particular, our studies propose a significant paradigm shift as they indicate that the development of T1D (and possibly other autoimmune diseases) is linked to aberrant immune regulation, rather than to direct activation of autoreactive lymphocytes. This constitutes a change in perspective as to which pathway(s) is the appropriate target for therapies aimed at controlling the progression of autoimmunity.