Accumulating evidence supports a critical role for post-translationally modified (PTM) islet neo-antigens in type 1 diabetes. However, our understanding regarding thymic development and peripheral activation of PTM autoantigen reactive T cells is still limited. Using HLA-DR4 humanized mice, we observed that deamidation of GAD65115-127 generates a more immunogenic epitope that recruits T cells with promiscuous recognition of both the deamidated and native epitopes, and reduced frequency of regulatory T cells. Using humanized HLA/TCR mice we observed that TCRs reactive to the native or deamidated GAD65115-127 led to efficient development of CD4+ effector T cells; however, regulatory T cell development was reduced in mice expressing the PTM reactive TCR, which was partially restored with exogenous PTM peptide. Upon priming, both the native specific and the deamidated specific T cells accumulated in pancreatic islets, suggesting that both specificities can recognize endogenous GAD65 and contribute to anti-beta cell responses. Collectively, our observations in polyclonal and single TCR systems suggest that while effector T cell responses can exhibit cross-reactivity between native and deamidated GAD65 epitopes, regulatory T cell development is reduced in response to the deamidated epitope, pointing to Treg development as a key mechanism for loss of tolerance to PTM antigenic targets.