The development and optimization of immune therapies in patients has been hampered by the lack of preclinical models in which their effects on human immune cells can be studied. As a result, observations that have been made in preclinical studies have suggested mechanisms of drug action in murine models that have not been confirmed in clinical studies. Here, we used a humanized mouse reconstituted with human hematopoietic stem cells to study the mechanism of action of teplizumab, an Fc receptor nonbinding humanized monoclonal antibody to CD3 being tested in clinical trials for the treatment of patients with type 1 diabetes mellitus. In this model, human gut-tropic CCR6⁺ T cells exited the circulation and secondary lymph organs and migrated to the small intestine. These cells then produced interleukin-10 (IL-10), a regulatory cytokine, in quantities that could be detected in the peripheral circulation. Blocking T cell migration to the small intestine with natalizumab, which prevents cellular adhesion by inhibiting α₄ integrin binding, abolished the treatment effects of teplizumab. Moreover, IL-10 expression by CD4⁺CD25^highCCR6⁺FoxP3 cells returning to the peripheral circulation was increased in patients with type 1 diabetes treated with teplizumab. These findings demonstrate that humanized mice may be used to identify novel immunologic mechanisms that occur in patients treated with immunomodulators.