Type 1 diabetes (T1D) remains a major health problem worldwide, with a steadily rising incidence yet no cure. Phosphoinositide 3-kinase-γ (PI3Kγ), a member of a family of lipid kinases expressed primarily in leukocytes, has been the subject of substantial research for its role in inflammatory diseases. However, the role of PI3Kγ inhibition in suppressing autoimmune T1D remains to be explored. We tested the role of the PI3Kγ inhibitor AS605240 in preventing and reversing diabetes in NOD mice and assessed the mechanisms by which this inhibition abrogates T1D. Our data indicate that the PI3Kγ pathway is highly activated in T1D. In NOD mice, we found upregulated expression of phosphorylated Akt (PAkt) in splenocytes. Notably, T regulatory cells (Tregs) showed significantly lower expression of PAkt compared with effector T cells. Inhibition of the PI3Kγ pathway by AS605240 efficiently suppressed effector T cells and induced Treg expansion through the cAMP response element-binding pathway. AS605240 effectively prevented and reversed autoimmune diabetes in NOD mice and suppressed T-cell activation and the production of inflammatory cytokines by autoreactive T cells in vitro and in vivo. These studies demonstrate the key role of the PI3Kγ pathway in determining the balance of Tregs and autoreactive cells regulating autoimmune diabetes.