Researchers said a cheap generic drug used as a vaccine against tuberculosis showed promise in a small human study as a potential therapy for Type 1 diabetes, one of medicine's most-difficult-to-treat diseases.

The drug, called BCG, for bacillus-Calmette-Guerin, appeared to halt the process that causes the disease, in which the immune system mounts an attack on the pancreas, destroying its ability to produce insulin required to regulate blood sugar.

In...