The risk of developing diabetes is higher in offspring of fathers than of mothers with insulin-dependent diabetes mellitus (IDDM). The reasons for this sex differential are unclear, as early studies were often selected and relatively small. We conducted a prospective study on the risk of IDDM in a cohort of 9,453 offspring from 5,255 Finnish parents with diabetes diagnosed before age 30 years. Age of first admission to the hospital was considered to be the age of diagnosis of IDDM in the offspring; IDDM occurred in 248 offspring. The risk of IDDM tended to be lower in the offspring of the same gender as the diabetic parent (adjusted risk ratio (RR) 0.78; p = 0.50). When offspring were of same gender as the diabetic parent, male offspring had a higher risk of IDDM than female offspring (RR 2.28; 95% confidence interval 1.53-3.38), whereas if the gender of the diabetic parent and the offspring were different, the risk in male offspring was lower (RR 0.43; 95% confidence interval 0.31-0.62). For the offspring of diabetic fathers, the cumulative risk by the age of 20 was higher (7.6%) than for those with diabetic mothers (3.5%) (p < 0.0001). In a multivariate analysis statistically significant predictors of IDDM in the offspring were the sex of the parent, the year of birth and the birth order of the offspring. The risk of IDDM in the offspring increased by 9% per year of birth cohort. By age 20, the cumulative risk of developing IDDM in the offspring of diabetic parents was 5.3%, 10 times higher than in the background population. It is likely that genetic factors seem to have played a major role in the continuous increase of IDDM incidence in Finnish children.