The prevalence of clinical and subclinical peripheral neuropathy was evaluated in 51 unselected children at the time of onset of type I diabetes. Twenty-eight patients were followed for one year in order to establish the influence of metabolic control on peripheral nerve function. Twenty-two % of the diabetic children showed nerve conduction abnormalities at the onset and 11.7% had clinical features of peripheral neuropathy. After one year of disease, these figures had changed to 14.3% and 7.1%. Five of 7 children with altered electrophysiological tests in the baseline assessment had had normalization of all parameters one year later. No correlations between insulin requirement and nerve conduction were found. The M value was significantly correlated only with median sensory conduction velocity (p less than 0.005). Significant correlations were demonstrated between HbA1 concentration and both peroneal motor conduction velocity (p less than 0.025) and median sensory conduction velocity (p less than 0.005); these correlations were still present after one year of disease. In the first period of diabetic disease there is functional rather than structural damage of the nerves. The pathogenetic role of hyperglycemia is confirmed; however individual susceptibility to nerve dysfunction may play an important role in the nerve impairment in diabetes.