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OBJECTIVE--The purpose of this study was to describe the incidence of type 1 diabetes in children in Philadelphia from 2000-2004, compare the epidemiology to the previous three cohorts in the Philadelphia Pediatric Diabetes Registry, and, for the first time, describe the incidence of type 2 diabetes. RESEARCH DESIGN AND METHODS--Diabetes cases were obtained through a retrospective population-based registry. Hospital inpatient and outpatient records were reviewed for cases of type 1 and type 2 diabetes diagnosed from 1 January 2000 to 31 December 2004. The secondary source of validation was the School District of Philadelphia. Time series analysis was used to evaluate the changing pattern of incidence over the 20-year period. RESULTS--The overall age-adjusted incidence rate in 2000-2004 of 17.0 per 100,000 per year was significantly higher than that of previous cohorts, with an average yearly increase of 1.5% and an average 5-year cohort increase of 7.8% (P = 0.025). The incidence in white children (19.2 per 100,000 per year) was 48%higher than in the previous cohort. Children aged 0-4 years had a 70% higher incidence (12.2 per 100,000 per year) than the original cohort; this increase was most marked in young black children. The overall age-adjusted incidence of type 2 diabetes was 5.8 per 100,000 per year and was significantly higher in black children. CONCLUSIONS--The incidence of type 1 diabetes is rising among children in Philadelphia. The incidence rate has increased by 29% since the 1985-1989 cohort. The most marked increases were among white children ages 10-14 years and black children ages 0-4 years. The incidence of type 1 diabetes is 18 times higher than that of type 2 in white children but only 1.6 times higher in black children. [ABSTRACT FROM AUTHOR]