Lung diffusing capacity (DLCO) is influenced by alveolar-capillary membrane conductance (D (M)) and pulmonary capillary blood volume (V (C)), both of which can be impaired in sedentary type 1 diabetes mellitus (T1DM) subjects due to hyperglycemia. We sought to determine if T1DM, and glycemic control, affected DLNO, DLCO, D (M), V (C) and SaO(2) during maximal exercise in aerobically fit T1DM subjects. We recruited 12 T1DM subjects and 18 non-diabetic subjects measuring DLNO, DLCO, D (M), and V (C) along with SaO(2) and cardiac output (Q) at peak exercise. The T1DM subjects had significantly lower DLCO/Q and D (M)/Q with no difference in Q, DLNO, DLCO, D (M), or V (C) (DLCO/Q = 2.1 ± 0.4 vs. 1.7 ± 0.3, D (M)/Q = 2.8 ± 0.6 vs. 2.4 ± 0.5, non-diabetic and T1DM, p < 0.05). In addition, when considering all subjects there was a relationship between DLCO/Q and SaO(2) at peak exercise (r = 0.46, p = 0.01). Within the T1DM group, the optimal glycemic control group (HbA1c <7%, n = 6) had higher DLNO, DLCO, and D (M)/Q than the poor glycemic control subjects (HbA1c ≥ 7%, n = 6) at peak exercise (DLCO = 38.3 ± 8.0 vs. 28.5 ± 6.9 ml/min/mmHg, DLNO = 120.3 ± 24.3 vs. 89.1 ± 21.0 ml/min/mmHg, D (M)/Q = 3.8 ± 0.8 vs. 2.7 ± 0.2, optimal vs. poor control, p < 0.05). There was a negative correlation between HbA1c with DLCO, D (M) and D (M)/Q at peak exercise (DLCO: r = -0.70, p = 0.01; D (M): r = -0.70, p = 0.01; D (M)/Q: r = -0.68, p = 0.02). These results demonstrate that there is a reduction in lung diffusing capacity in aerobically fit athletes with T1DM at peak exercise, but suggests that maintaining near-normoglycemia potentially averts lung diffusion impairments.