Type 1 diabetes is caused by autoreactive T cell-mediated β cell destruction. Even though co-inhibitory receptor programmed death-1 (PD-1) restrains autoimmunity, the expression and regulation of its cognate ligands on β cell remains unknown. Here, we interrogated β cell-intrinsic programmed death ligand-1 (PD-L1) expression in mouse and human islets. We measured a significant increase in the level of PD-L1 surface expression and the frequency of PD-L1⁺ β cells as non-obese diabetic (NOD) mice aged and developed diabetes. Increased β cell PD-L1 expression was dependent on T cell infiltration, as β cells from Rag1-deficient mice lacked PD-L1. Using Rag1-deficient NOD mouse islets, we determined that IFN-γ promotes β cell PD-L1 expression. We performed analogous experiments using human samples, and found a significant increase in β cell PD-L1 expression in type 1 diabetic samples compared to type 2 diabetic, autoantibody positive, and non-diabetic samples. Among type 1 diabetic samples, β cell PD-L1 expression correlated with insulitis. In vitro experiments with human islets from non-diabetic individuals showed that IFN-γ promoted β cell PD-L1 expression. These results suggest that insulin-producing β cells respond to pancreatic inflammation and IFN-γ production by upregulating PD-L1 expression to limit self-reactive T cells.