We will determine the safety and efficacy of 30,000 units ingested hrIFN-a vs placebo in eighty patients with newly diagnosed type 1 diabetes in a phase II trial for one year. Primary outcome measures will be a 30% increase in C-peptide levels released after Sustacal stimulation at 3, 6, 9, and 12 months after entry. Secondary outcome will be decreasing titers of islet cell antibodies (ICA). If successful, a larger and longer phase III trial of prevention of type 1 diabetes in high risk patients will be undertaken. We will also determine if ingested hrIFN-a increases IL-4, IL-10 or IFN-a production in peripheral blood mononuclear cells (PMNC) from patients with recent onset type 1 diabetes.