In type 1 diabetes, an autoimmune disease mediated by autoreactive T-cells that attack insulin-secreting pancreatic beta-cells, it has been suggested that disease progression may additionally require protective mechanisms in the target tissue to impede such auto-destructive mechanisms. We hypothesize that the autoimmune attack against beta-cells causes endoplasmic reticulum stress by forcing the remaining beta-cells to synthesize and secrete defective insulin. To rescue beta-cell from the endoplasmic reticulum stress, beta-cells activate the unfolded protein response to restore protein homeostasis and normal insulin synthesis. Here we investigate the compensatory role of unfolded protein response by developing a multi-state model of type 1 diabetes that takes into account beta-cell destruction caused by pathogenic autoreactive T-cells and apoptosis triggered by endoplasmic reticulum stress. We discuss the mechanism of unfolded protein response activation and how it counters beta-cell extinction caused by an autoimmune attack and/or irreversible damage by endoplasmic reticulum stress. Our results reveal important insights about the balance between beta-cell destruction by autoimmune attack (beta-cell homicide) and beta-cell apoptosis by endoplasmic reticulum stress (beta-cell suicide). It also provides an explanation as to why UPR may not be a successful therapeutic target to treat type 1 diabetes.