We recently showed that attenuation of inflammatory cytokine MIF with pharmacological inhibitor ISO-1 down-regulates the immune-mediated diabetes in mice. Here we explore the effects of MIF neutralization by ISO-1 on the local inflammatory pathway of the disease. In vivo treatment of mice with ISO-1 inhibited the expression of proinflammatory cytokines and iNOS in the pancreatic islets. Moreover, ISO-1 affected in vitro cytokine-induced NO production by fibroblasts, endothelial cells, insulinoma cells, and pancreatic islets, and rescued β cells from NO-dependent damage. These results suggest regulatory potential of ISO-1 at the level of the pancreas which can preserve the target tissue from autoimmune attack.