Examined neurocognitive functions in 63 newly diagnosed pediatric patients with insulin-dependent diabetes mellitus (DM) at onset of illness (T0) and 1 year postdiagnosis (T1). Siblings (S) serving as controls were assessed at T0 only. Subjects were given age-appropriate tests of verbal and visuospatial abilities. In addition, DM were interviewed regularly during diabetes clinic to determine current diabetic control and different intervening glycemic-related events. Results revealed no differences between DM and S at T0, nor any specific impairment in DM predating illness. Also, DM did not demonstrate any acquired impairment after 1 year of illness. Children with early onset DM (less than 5 years) scored lower in spatial ability at T0 and T1 than children with later onset DM, who scored lower in verbal ability. Episodes of asymptomatic and mild chronic hypoglycemia correlated positively, not negatively, with improved outcome over time. There were no adverse effects of severe hypoglycemia. Ketonuria and hospitalizations were associated with lower performance IQs 1 year after onset, as was diabetic ketoacidosis at onset. Results are discussed in terms of critical periods of sensitivity of different brain regions to the effects of diabetes and the need for longer follow-up of these children.