OBJECTIVE - This trial tested whether mycophenolate mofetil (MMF) alone or with daclizumab (DZB) could arrest the loss of insulin-producing β-cells in subjects with new-onset type 1 diabetes. RESEARCH DESIGN AND METHODS - A multi-center, randomized, placebo-controlled, double-masked trial was initiated by Type 1 Diabetes TrialNet at 13 sites in North America and Europe. Subjects diagnosed with type 1 diabetes and with sufficient C-peptide within 3 months of diagnosis were randomized to either MMF alone, MMF plus DZB, or placebo, and then followed for 2 years. The primary outcome was the geometric mean area under the curve (AUC) C-peptide from the 2-h mixed meal tolerance test. RESULTS - One hundred and twenty-six subjects were randomized and treated during the trial. The geometric mean C-peptide AUC at 2 years was unaffected by MMF alone or MMF plus DZB versus placebo. Adverse events were more frequent in the active therapy groups relative to the control group, but not significantly. CONCLUSIONS - Neither MMF alone nor MMF in combination with DZB had an effect on the loss of C-peptide in subjects with new-onset type 1 diabetes. Higher doses or more targeted immunotherapies may be needed to affect the autoimmune process.