Type 1 diabetes (T1D) is an autoimmune disease marked by permanent loss of insulin-producing pancreatic β cells. Genome wide association studies have identified protein tyrosine non receptor type 2 (PTPN2) as a high-risk T1D gene. PTPN2 has been classically implicated in immune cell function, but is expressed in T cells, B cells, and in pancreatic β cells. Mice with a β cell specific knock out (KO) of ptpn2 exhibit impaired function and increased susceptibility to stress induced β cell death. We hypothesized that altered PTPN2 expression in pancreatic beta cells may contribute to T1D disease development. In order to study PTPN2 in the human context we generated CRISPR/Cas9 mediated clonal PTPN2 knock out (KO) hPSCs, abolishing the functional domain of PTPN2. PTPN2 KO and WT hPSCs were differentiated into functional stem cell derived beta-like cells (sBCs) using our published protocol without significant differences in key developmental markers or insulin content. Compared to WT sBC, PTPN2 KO sBCs at steady state and under T1D stress conditions show increased expression of HLA Class I molecules important in T cell recognition. To investigate the interaction of KO or WT sBCs with diabetogenic T cells we employed an HLA-peptide-TCR matched coculture system we recently established. Using this system, we observed increased stimulation of diabetogenic TCR T cell transductants by KO sBC compared to WT. Our data provide evidence for a potential mechanism by which PTPN2, a known T1D high-risk gene may contribute to an immunogenic phenotype of β cells. Our findings suggest that dysregulation of PTPN2 expression contributes to an autoimmune response towards human β cells thus contributing to the pathogenesis of type 1 diabetes. Disclosure J. Q. Matuschek: None. H. A. Russ: Consultant; Eli Lilly and Company, Sigilon Therapeutics, Inc. T. M. Triolo: None. A. W. Michels: Employee; ImmunoMolecular Therapeutics, Stock/Shareholder; ImmunoMolecular Therapeutics. K. Mcdaniel: None. M. S. Hansen: None. S. Williams: None. R. Castro-gutierrez: None. A. Shilleh: None. Funding NIH: K12DK094712