Growth potential among people with Type 1 diabetes and subclinical hypothyroidism may be significantly reduced. Growth was evaluated in 25 children with diabetes who had thyromegaly and elevated thyrotrophin (TSH) levels. All patients appeared clinically euthyroid except for four with short stature. Basal growth rate was significantly lower (p less than 0.005) in Group 1 (TSH greater than 50 mU l-1) and Group 2 (TSH level 10.1-50 mU l-1) than in patients with TSH levels between 5 and 10 mU l-1 (Group 3) or control diabetic children. Serum thyroxine (T4) levels were significantly lower (p less than 0.05) in Group 1 than in Groups 2 or 3. Significant improvement in growth velocity after thyroxine treatment was observed in Group 1 patients compared with those in Groups 2 or 3 (p less than 0.05). More prepubertal test children demonstrated improved growth after beginning thyroxine compared with matched diabetic controls (p less than 0.02). Postpubertal subjects treated with thyroxine did not show significant differences in growth velocity compared with controls. Z-scores for height were not different (p greater than 0.05; ANOVA) between control and test patients for any of the groups. Early detection of subclinical hypothyroidism by thyromegaly, reduced growth velocity, and elevated TSH levels, with institution of thyroxine treatment, can improve growth in prepubertal diabetic children.