Permanent neonatal diabetes mellitus (PNIDDM) is a rare form of IDDM with unclear etiology and pathogenesis. We determined the incidence and prevalence rates and studied the clinical and biochemical features of PNIDDM in the Sultanate of Oman. The mean incidence rate during the study period from January 1989 to December 1994 was 1.788 +/- 0.82 per 100,000 live births per year. At the end of December 1994 the prevalence rate was 2.4 per 100,000 children below the age of 5 years. They constituted 41.6% of all cases of IDDM in this age group. Diarrhoea, fever, lethargy, poor feeding and failure to thrive were the most common presenting symptoms. Dehydration and tachypnoea were the most common signs. All patients who developed IDDM during the neonatal period had intrauterine growth retardation and 4.5 presented with diabetic ketoacidosis (plasma glucose 37 +/- 9 mmol/L, pH 7.12 +/- 0.1). Hypertriglyceridemia was a constant feature (19.4 +/- 4.8 mmol/L). They were products of consanguineous marriage with significantly high prevalence of IDDM and NIDDM in their family members. None of the infants had clinical or immunological evidence of congenital viral infection. Three of the five children had HLA-DR2, the diabetes resistance alleles. C-peptide secretion was absent during and after metabolic control of hyperglycemia in all the studied infants and none had circulating islet cell antibody at presentation or during the first year after diagnosis. Despite marked growth retardation at birth, there was a significant improvement of growth after initiating insulin therapy. Four of the 5 patients had normal developmental milestones, one had mild developmental delay following a severe and prolonged attack of hypoglycemia. None of the patients had exocrine pancreatic deficiency. In summary, the very high rate of parental consanguinity, occurrence in both sexes and in two siblings in the same family, absence of islet cell antibodies and the presence of HLA-DR2 loci in 3/5 of patients suggest that PNIDDM is a different disease process to standard IDDM in childhood and an autosomal recessive mode of transmission.