© 2015 by the American Diabetes Association. Macrophages are early islet-infiltrating cells seen in type 1 diabetes (T1D). While proinflammatory M1 macrophages induce T1D, M2 macrophages have been shown to delay this autoimmune disease in nonobese diabetic (NOD) mice, but the environmental cues that govern macrophage polarization and differentiation remain unresolved. We previously demonstrated the importance of reactive oxygen species (ROS) in T1D, as NOD mice deficient in NADPH oxidase (NOX)-derived superoxide (Ncf1m1J) were protected against T1D partly because of blunted Toll-like receptor-dependent macrophage responses. We provide evidence that NOX-derived ROS contribute to macrophage differentiation in T1D. During spontaneous diabetes progression, T1D-resistant NOD.Ncf1m1J islet-resident macrophages displayed a dampened M1 and increased M2 phenotype. The transfer of diabetogenic T cells into NOX-deficient NOD.Rag.Ncf1m1J recipients resulted in decreased TNF-α+ and IL-1β+ islet-infiltrating M1 macrophages and a concomitant enhancement in arginase-1+ M2 macrophages. Mechanistic analysis of superoxide-deficient bone marrow-derived macrophages revealed a marked diminution in a proinflammatory M1 phenotype due to decreased PSTAT1 (Y701) and interferon regulatory factor 5 compared with NOD mice. We have therefore defined a novel mechanistic link between NOX-derived ROS and macrophage phenotypes, and implicated superoxide as an important factor in macrophage differentiation. Thus, targeting macrophage redox status may represent a promising therapy in halting human T1D.