Type 1 diabetes (T1D) results from autoimmune destruction of insulin-producing beta cells in pancreatic islets. The degradation of the glycosaminoglycan heparan sulfate (HS) by the endo-β-D-glycosidase heparanase plays a critical role in multiple stages of the disease process. Heparanase aids (i) migration of inflammatory leukocytes from the vasculature to the islets, (ii) intra-islet invasion by insulitis leukocytes, and (iii) selective destruction of beta cells. These disease stages are marked by the solubilization of HS in the subendothelial basement membrane (BM), HS breakdown in the peri-islet BM, and the degradation of HS inside beta cells, respectively. Significantly, healthy islet beta cells are enriched in highly sulfated HS which is essential for their viability, protection from damage by reactive oxygen species (ROS), beta cell function and differentiation. Consequently, mouse and human beta cells but not glucagon-producing alpha cells (which contain less-sulfated HS) are exquisitely vulnerable to heparanase-mediated damage. In vitro, the death of HS-depleted mouse and human beta cells can be prevented by HS replacement using highly sulfated HS mimetics or analogues. T1D progression in NOD mice and recent-onset T1D in humans correlate with increased expression of heparanase by circulating leukocytes of myeloid origin and heparanase-expressing insulitis leukocytes. Treatment of NOD mice with the heparanase inhibitor and HS replacer, PI-88, significantly reduced T1D incidence by 50%, impaired the development of insulitis and preserved beta cell HS. These outcomes identified heparanase as a novel destructive tool in T1D, distinct from the conventional cytotoxic and apoptosis-inducing mechanisms of autoreactive T cells. In contrast to exogenous catalytically active heparanase, endogenous heparanase may function in HS homeostasis, gene expression and insulin secretion in normal beta cells and immune gene expression in leukocytes. In established diabetes, the interplay between hyperglycemia, local inflammatory cells (e.g. macrophages) and heparanase contributes to secondary micro- and macro-vascular disease. We have identified dual activity heparanase inhibitors/HS replacers as a novel class of therapeutic for preventing T1D progression and potentially for mitigating secondary vascular disease that develops with long-term T1D.