Autoimmune diabetes occurs when invading lymphocytes destroy insulin-producing beta cells in pancreatic islets. The role of lymphocytic aggregates at this inflammatory site is not understood. We find that B and T lymphocytes attacking islets in NOD mice organize into lymphoid structures with germinal centers. Analysis of BCR L chain genes was used to investigate selection of B lymphocytes in these tertiary lymphoid structures and in draining pancreatic lymph nodes. The pancreatic repertoire as a whole was found to be highly diverse, with the profile of L chain genes isolated from whole pancreas differing from that observed in regional lymph nodes. A Vkappa14 L chain predominated within the complex pancreatic repertoire of NOD mice. Skewing toward Vkappa4 genes was observed in the pancreas when the repertoire of NOD mice was restricted using a fixed Ig H chain transgene. Nucleotide sequencing of expressed Vkappas identified shared mutations in some sequences consistent with Ag-driven selection and clonal expansion at the site of inflammation. Isolated islets contained oligoclonal B lymphocytes enriched for the germinal center marker GL7 and for sequences containing multiple mutations within CDRs, suggesting local T-B interactions. Together, these findings identify a process that selects B lymphocyte specificities within the pancreas, with further evolution of the selected repertoire at the inflamed site. This interpretation is reinforced by Ag-binding studies showing a large population of insulin-binding B lymphocytes in the pancreas compared with draining lymph nodes.