Aims To determine whether abnormal lipid levels in children with Type 1 diabetes mellitus are the result of poor metabolic control or may in part be determined by genetic factors. Methods Non-fasting lipid levels were measured in 141 children with Type 1 diabetes (age range 7.7-19 years) 3 years after diagnosis, and in 192 of their parents. Glycosylated haemoglobin and the urinary albumin-creatinine ratio (three urine samples) were estimated in each child annually. Results The children had a mean total cholesterol of 4.46 +/- 1.25 mmol/l (+/- so) and a median triacylglycerol of 1.18 mmol/l (range 0.32-4.7), A total of 15.3% of the population had a total cholesterol > 5.2 mmol/l and 17.9% had a triacylglycerol > 1.7 mmol/l; in 5.6% both total cholesterol and triacylglycerol were greater than these cut-off points. Total cholesterol, triacylglycerol and very low density lipoprotein-cholesterol were significantly correlated to glycaemic control. However, total cholesterol was also significantly related to parental total cholesterol either as analysed separately or as mean parental total cholesterol (p = 0.37, P = 0.0001), In stepwise multiple regression analysis both mean parental total cholesterol (P = 0.001) and HbA(1c) (P = 0.015) were significant determinants of the child's total cholesterol. The children studied were being followed prospectively for the development of microalbuminuria and there was a weak association across tertiles of total cholesterol, linking higher levels to the development of microalbuminuria (P < 0.05). Conclusions We conclude that both glycaemic control and familial factors may be important determinants of lipid levels in young people with diabetes. Both ma!: contribute to the subsequent risk of cardiovascular disease and possibly the development of incipient diabetic nephropathy.