The CNS is one of the main organ systems that is affected in type 1 diabetes, as both cerebral glucose and insulin levels are frequently abnormal, even when the diabetes is well-controlled. Literature is emerging that documents pathophysiological CNS changes and neurocognitive deficits in both adults and children with type 1 diabetes, but empirical findings to date have often been inconsistent and difficult to interpret. This article provides a comprehensive review of current knowledge about the impact of type 1 diabetes on brain development and function, focusing particularly on the evidence for specific illness-related risk factors for CNS sequelae. We argue that clinical management of young patients with type 1 diabetes should take into account current knowledge of the relative risks of hypoglycemia and hyperglycemia to the developing brain.