A sensitive assay was used to measure the binding of iodine-125-labeled insulin in serum obtained from 112 newly diagnosed insulin-dependent diabetics before insulin treatment was initiated. Two groups of nondiabetics served as controls: children with a variety of diseases other than diabetes and nondiabetic siblings of insulin-dependent diabetics. Eighteen of the diabetics were found to have elevated binding and 36 were above the 95th percentile of control values. The insulin-binding protein is precipitated by antibody to human immunoglobulin G, has a displacement curve that is parallel and over the same concentration range as serum from long-standing insulin-dependent diabetics, and elutes from a Sephacryl S-300 column at the position of gamma globulin. These insulin antibodies are present in a large percentage of newly diagnosed, untreated diabetics and may be an immune marker of B-cell damage.