Aims  To explore how socioeconomic factors and population density may contribute to the geographical variation of incidence of Type 1 diabetes in children in south-eastern Sweden.

Method  All children diagnosed with Type 1 diabetes in south-eastern Sweden during 1977–2001 were defined geographically to their place of residence and were allocated x and y coordinates in the national grid. The population at risk and socioeconomic data were aggregated in 82 000 200-m squares and geocoded likewise. A socioeconomic index was calculated using a signed χ² method. Rural–urban gradients were defined by overlay analysis in a geographic information system.

Results  The incidence during the past 25 years has been rising steadily, particularly in the last 6 years. The incidence was highest in areas with a high proportion of small families, of families with a high family income and better education, and this was found both at the time of diagnosis and at the time of birth. In the rural–urban analysis, the lowest incidence was found in the urban area with > 20 000 inhabitants, where there was also a higher frequency of deprivation.

Conclusions  Our findings indicate that geographical variations in incidence rates of Type 1 diabetes in children are associated with socioeconomic factors and population density, although other contributing factors remain to be explained.