Abstract Background European ecologic studies suggest higher socioeconomic status is associated with higher incidence of type 1 diabetes. Using data from a case-control study of diabetes among racially/ethnically diverse youth in the United States (U.S.), we aimed to evaluate the independent impact of neighborhood characteristics on type 1 diabetes risk. Data were available for 507 youth with type 1 diabetes and 208 healthy controls aged 10-22 years recruited in South Carolina and Colorado in 2003-2006. Home addresses were used to identify Census tracts of residence. Neighborhood-level variables were obtained from 2000 U.S. Census. Multivariate generalized linear mixed models were applied. Results Controlling for individual risk factors (age, gender, race/ethnicity, infant feeding, birth weight, maternal age, number of household residents, parental education, income, state), higher neighborhood household income (p = 0.005), proportion of population in managerial jobs (p = 0.02), with at least high school education (p = 0.005), working outside the county (p = 0.04) and vehicle ownership (p = 0.03) were each independently associated with increased odds of type 1 diabetes. Conversely, higher percent minority population (p = 0.0003), income from social security (p = 0.002), proportion of crowded households (0.0497) and poverty (p = 0.008) were associated with a decreased odds. Conclusions Our study suggests that neighborhood characteristics related to greater affluence, occupation, and education are associated with higher type 1 diabetes risk. Further research is needed to understand mechanisms underlying the influence of neighborhood context.