Genetic studies of type 1 diabetes (T1D) have been advanced by comparative analysis of multiple susceptible and resistant rat strains with a permissive class II MHC haplotype, RT1(u). LEW.1WR1 (but not resistant LEW.1W or WF) rats are susceptible to T1D induced by a TLR3 agonist polyinosinic:polycytidylic acid followed by infection with parvovirus. We have mapped genetic loci for virus-induced T1D susceptibility, identifying a major susceptibility locus (Iddm37) near the MHC. The Iddm37 homologs on mouse and human chromosomes are also diabetes linked. We report that a major effect gene within Iddm37 is diubiquitin (Ubd). Gene expression profiling of pancreatic lymph nodes in susceptible and resistant rats during disease induction showed differences in Ubd transcript abundance. The LEW.1WR1 Ubd promoter allele leads to higher inducible levels of UBD than that of LEW.1W or WF. Using zinc-finger nucleases , we deleted a segment of the LEW.1WR1 Ubd gene and eliminated its expression. UBD-deficient rats show substantially reduced diabetes after viral infection. Complementary studies show that there may be another diabetes gene in addition to Ubd in the Iddm37 interval. These data prove that Ubd is a diabetes susceptibility gene, providing insight into the interplay of multiple genes and environmental factors in T1D susceptibility.