Background: Automated insulin delivery (AID) systems have demonstrated improvements in time-in-range (TIR, blood glucose 70-180 mg/dL) without increasing hypoglycemia. Testing a closed-loop system in an inpatient environment with supervised challenges allows for initial evaluation of performance and safety of the system. Methods: Adults with type 1 diabetes (T1D) were enrolled into two similar studies (n = 10 per study), with 3-day inpatient analysis periods. Participants tested a Lilly hybrid closed-loop (HCL) system comprising an investigational insulin pump, insulin lispro, a pump-embedded model predictive control algorithm, a continuous glucose monitor (CGM), and an external dedicated controller. Each protocol included meal-related and exercise challenges to simulate real-world diabetes self-management errors. Only study staff interacted with the HCL system. Performance was assessed using standard CGM metrics overall and within prespecified periods. Results: Participants (25% male) had mean ± standard deviation (SD) age 44.7 ± 14.2 years, T1D duration 30.2 ± 11.1 years, A1C 7.2% ± 0.8%, and insulin usage 0.53 ± 0.21 U/(kg·day). Percentage TIR 70-180 mg/dL (mean ± SD) was 81.2 ± 8.4 overall, 85.2 ± 8.1 outside of challenge periods, 97.3 ± 5.3 during the nocturnal periods, and 74.5 ± 16.2 for the postprandial periods. During challenge periods, percentage TIR for the overbolus challenge was 65.4 ± 29.2 and that for the delayed bolus challenge was 57.1 ± 25.1. No adverse events (AEs), serious AEs, or unanticipated adverse device events occurred while participants were using the HCL system. Conclusions: In participants with T1D, Lilly AID system demonstrated expected algorithm performance and safety with satisfactory glycemic outcomes overall and in response to simulated diabetes management challenges. Additional studies in less supervised conditions and with broader patient populations are warranted. ClinicalTrials.gov Registration number NCT03743285, NCT03849612.