School-aged children with newly diagnosed insulin-dependent diabetes mellitus (IDDM) were studied longitudinally in order to document how they adjusted to the medical illness and to assess salient background factors. The extent of life stress and the prevalence of psychiatric disorders that predated the IDDM were within normative ranges, and there was no characteristic preexisting "diabetic personality." The initial strain of living with IDDM elicited two general modes of coping. The prototypical and subdued reaction (seen in 64% of the children) consisted of mild sadness, anxiety, feeling of friendlessness, and social withdrawal. The rest of the children (36%) exhibited reactions that met criteria for a psychiatric disorder; depressive syndromes were the most common presentations. Anamnestic factors and the parents' initial responses to their children's IDDM were unrelated to how the children themselves coped. However, psychiatrically diagnosable reactions were more likely among children whose parents were of low socioeconomic status and had marital distress. Coping with the diagnosis and the early impact of IDDM took no more than 7 to 9 months, no matter how severe the child's response was initially.