In order to study the long-term development of diabetic neuropathy in children with newly diagnosed diabetes mellitus, 144 children were entered in a prospective study of nerve conduction and autonomic nervous function. Neurophysiological recordings of nerve conduction and parasympathetic function (R-R variations) were made at onset of diabetes and after 2, 5 and 10 years. Low sensory nerve conduction and autonomic dysfunction were found in approximately 25% of the children at onset of diabetes when the patients were not yet in complete remission. During years 0-2, an initial improvement of sensory conduction velocities was found. After 2 years, deteriorations in sensory and motor nerve conduction and autonomic nerve function were common and further deterioration was seen over time. A correlation was found between nerve conduction and glycaemic control.