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Twenty-nine children, aged 1-15 yr, with newly diagnosed insulin-dependent diabetes mellitus (IDDM) had sera taken before insulin therapy to be examined for the presence of insulin-receptor antibodies by measuring the inhibition of binding of radiolabeled insulin to IM-9 lymphocytes in both whole serum and purified IgG fractions. Groups of children with long-standing IDDM and autoimmune endocrine disease as well as a normal control group were studied. A positive result, defined as binding greater than or equal to 2 SD below the mean zero standard, was found in 3 (10.3%) of the 29 newly diagnosed diabetic patients. As a group, they showed significantly greater binding inhibition than the normal control group for both whole serum and purified IgG (one-tailed t test, P less than .05 and P less than .002, respectively). Insulin autoantibodies were also measured by a sensitive radioimmunoassay technique. A positive result, defined as binding greater than 3 SD above the normal control pooled sera, was found in 9 (37.5%) of 24 of the newly diagnosed IDDM group tested. All 3 subjects positive for insulin-receptor antibodies were also positive for insulin autoantibodies, whereas 6 of the 21 receptor-antibody-negative subjects were positive for insulin autoantibodies (Fisher's exact test, P = .0415). This suggests the possibility that the presence of insulin autoantibodies is a prerequisite for the development of insulin-receptor antibodies, i.e., as an anti-idiotypic response. Insulin-receptor antibodies and insulin autoantibodies may play a currently undefined pathophysiologic role in the development of IDDM.(ABSTRACT TRUNCATED AT 250 WORDS)