Type 1 Diabetes (T1D) is an autoimmune disease marked by direct elimination of insulin-producing β cells by autoreactive T effectors. Recent T1D clinical trials utilizing autologous Tregs transfers to restore immune balance and improve disease has prompted us to design a novel Tregs-based antigen-specific T1D immunotherapy. We engineered a Chimeric Antigen Receptor (CAR) expressing a single-chain Fv recognizing the human pancreatic endocrine marker, HPi2. Human T cells, transduced with the resultant HPi2-CAR, proliferated and amplified Granzyme B accumulation when co-cultured with human, but not mouse β cells. Furthermore, following exposure of HPi2-CAR transduced cells to islets, CD8+ lymphocytes demonstrated enhanced CD107a (LAMP-1) expression, while CD4+ cells produced increased levels of IL-2. HPi2-CAR Tregs failed to maintain expansion due to a persistent tonic signaling from the CAR engagement to unexpectantly HPi2 antigen present on Tregs. Overall, we show lack of functionality of HPi2-CAR and highlight the importance of careful selection of CAR recognition driver for the sustainable activity and expandability of engineered T cells.