This article examines the relationship between hypoglycemia and brain function in children with type 1 diabetes. Hypoglycemic episodes occurring in the first 5 years of life may permanently disrupt cognitive function in a subset of children with diabetes, and a single acute episode of hypoglycemia may produce a transient reduction in mental efficiency, alter the electroencephalogram, and increase regional cerebral blood flow. Because iatrogenic development of hypoglycemic unawareness and autonomic failure are the most likely mediators of moderately severe hypoglycemia, medical management efforts should be directed at the prevention of frequently recurring, mild hypoglycemia.