Insulin-dependent diabetes mellitus (Type I) is associated with disregulation of the glucose and oxygen metabolic pathways during pregnancy, both of which affect placental villous development. Term complete placentas and placental bed biopsies, between 37 and 40 weeks, from 12 singleton pregnancies complicated by Type I diabetes were collected following delivery by elective Caesarean section. The controls consisted of 10 term placentas from uncomplicated pregnancies delivered by elective Caesarean section. Villous morphology was investigated using unbiased histomorphometric techniques, in relation to the degree of transformation of the spiral arteries and the presence of fetal macrosomia. A significant increase in fetal and placental weights, placental volume, volumes of the intervillous space and the trophoblast was found in the diabetic group compared to the controls. A significant reduction in the villous membrane specific diffusing capacity was observed between the diabetic and control groups (1.32 vs 1.72 cm3 min(-1)mmHg(-1)kg(-1), P=0.032). A significant increase in the volume of the intermediate and terminal villi, the surface area of the villi and of the fetal capillaries, and the harmonic thickness of the villous membrane was found in the macrosomic subgroup compared to the controls. There were no differences between the hypertensive subgroup with histological evidence of partial transformation of the spiral arteries and the controls. These data indicate that placental development in insulin-dependent diabetic pregnancies is affected differentially when pregnancies complicated by fetal macrosomia are separated from those complicated by maternal hypertensive disorders with partial transformation of the spiral arteries. The reduction in the specific diffusing capacity of the villous membrane may contribute to the fetal hypoxia and increased fetal and neonatal morbidity associated with diabetes.