The mechanisms whereby immune therapies affect progression of type 1 diabetes (T1D) are not well understood. Teplizumab, an FcR nonbinding anti‐CD3 mAb, has shown efficacy in multiple randomized clinical trials. We previously reported an increase in the frequency of circulating CD8⁺ central memory (CD8CM) T cells in clinical responders, but the generalizability of this finding and the molecular effects of teplizumab on these T cells have not been evaluated. We analyzed data from two randomized clinical studies of teplizumab in patients with new‐ and recent‐onset T1D. At the conclusion of therapy, clinical responders showed a significant reduction in circulating CD4⁺ effector memory T cells. Afterward, there was an increase in the frequency and absolute number of CD8CM T cells. In vitro, teplizumab expanded CD8CM T cells by proliferation and conversion of non‐CM T cells. Nanostring analysis of gene expression of CD8CM T cells from responders and nonresponders versus placebo‐treated control subjects identified decreases in expression of genes associated with immune activation and increases in expression of genes associated with T‐cell differentiation and regulation. We conclude that CD8CM T cells with decreased activation and regulatory gene expression are associated with clinical responses to teplizumab in patients with T1D.