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Background: Type 1 diabetes (T1D) is a T cell-mediated autoimmune disease that causes a deficit of pancreatic islet β cells. The complexities of overcoming autoimmunity in T1D have contributed to the challenges the research community faces when devising successful treatments with conventional immune therapies. Overcoming autoimmune T cell memory represents one of the key hurdles., Methods: In this open-label, phase 1/phase 2 study, Caucasian T1D patients (N = 15) received two treatments with the Stem Cell Educator (SCE) therapy, an approach that uses human multipotent cord blood-derived multipotent stem cells (CB-SCs). SCE therapy involves a closed-loop system that briefly treats the patient's lymphocytes with CB-SCs in vitro and returns the "educated" lymphocytes (but not the CB-SCs) into the patient's blood circulation. This study is registered with ClinicalTrials.gov, NCT01350219., Findings: Clinical data demonstrated that SCE therapy was well tolerated in all subjects. The percentage of naïve CD4(+) T cells was significantly increased at 26 weeks and maintained through the final follow-up at 56 weeks. The percentage of CD4(+) central memory T cells (TCM) was markedly and constantly increased at 18 weeks. Both CD4(+) effector memory T cells (TEM) and CD8(+) TEM cells were considerably decreased at 18 weeks and 26 weeks respectively. Additional clinical data demonstrated the modulation of C-C chemokine receptor 7 (CCR7) expressions on naïve T, TCM, and TEM cells. Following two treatments with SCE therapy, islet β-cell function was improved and maintained in individuals with residual β-cell function, but not in those without residual β-cell function., Interpretation: Current clinical data demonstrated the safety and efficacy of SCE therapy in immune modulation. SCE therapy provides lasting reversal of autoimmune memory that could improve islet β-cell function in Caucasian subjects., Funding: Obra Social "La Caixa", Instituto de Salud Carlos III, Red de Investigación Renal, European Union FEDER Funds, Principado de Asturias, FICYT, and Hackensack University Medical Center Foundation.