Background and aim Type 1 diabetes is an autoimmune disorder characterized by the destruction of pancreatic beta cells, leading to insulin deficiency and hyperglycemia. Regulatory T cells (Tregs), particularly type 1 regulatory T (Tr1) cells, play a crucial role in modulating autoimmune responses. Therefore, this study aimed to evaluate the frequency of Tr1 cells and their association with aryl hydrocarbon receptor (AHR) and interferon regulatory factor-4 (IRF4) gene expression levels in type 1 diabetes mellitus (T1DM) compared to the healthy controls. Method A case-control study design was used. The case group included patients diagnosed with T1DM, while the control group consisted of healthy individuals, matched for age and sex. Blood samples were collected, and peripheral blood mononuclear cells (PBMCs) were isolated. Serum interleukin 10 (IL-10) and interleukin 21 (IL-21) levels were measured using enzyme-linked immunosorbent assay (ELISA). The gene expression of AHR and IRF4 was analyzed using quantitative real-time polymerase chain reaction (qPCR), and Tr1 cell populations were determined using flow cytometry. Data were summarized with mean and standard error of the mean (SEM) for quantitative variables. Independent sample t-test, chi-square test, and the Mann-Whitney U test were used to compare groups. Statistical analyses were performed using SPSS version 25 (IBM SPSS Statistics, Armonk, NY), with significance levels set at p < 0.05. Figures were created using GraphPad Prism (GraphPad Software, San Diego, CA). Results A total of 45 cases were enrolled in the study, with 30 T1DM patients and 15 healthy controls. The mean IL-10 concentration was significantly higher in the patients (10.4 ± 1.1 pg/mL) compared to the healthy controls (5.1 ± 0.7 pg/mL), with a p-value of 0.001. There was no significant difference in IL-21 levels between the patients (76.1 ± 9.0 pg/mL) and healthy controls (88.2 ± 17.5 pg/mL), indicated by a p-value of 0.480. AHR gene expression was significantly lower in patients, with a p-value of 0.037. Although IRF4 gene expression was higher in patients, the difference was not statistically significant (p= 0.449). Tr1 cell frequency was significantly higher in T1DM patients (1.45% of cluster of differentiation 4+ {CD4+} T cells) compared to the healthy controls (0.40% of CD4+ T cells), with a p-value of 0.045. Conclusions The study demonstrated that T1DM is associated with higher IL-10 levels, decreased AHR gene expression, and a higher frequency of Tr1 cells. Policymakers should focus on developing targeted immunomodulatory therapies to address these immunological abnormalities. Healthcare providers should prioritize monitoring cytokine levels and gene expression in T1DM patients to tailor treatment plans effectively. Further research is needed to explore the therapeutic potential of modulating Tr1 cells and their related pathways in T1DM management.