Intellectual disability (ID) is a major public health condition that usually develops in utero and causes lifelong disability. Despite improvements in pregnancy and delivery care that have resulted in dramatic decreases in infant mortality rates, the incidence of ID has remained constant over the past 20 years. There may still be uncharacterized preventable causes of ID such as Diabetes Mellitus (DM). We used statewide individual level de-identified data for maternal and child pairs obtained by linking Medicaid claims, Department of Education, and Department of Disabilities and Special Needs data from 2000 to 2007 for all mother-child pairs with a minimum follow-up of 3-years post birth or until a diagnosis of ID. To ascertain the adjusted relationship between DM and ID, we fit a logistic regression model taking into account individual level clustering on mothers for multiple pregnancies using the population-averaged Generalized Estimating Equations method. Of the 162,611 eligible maternal and child pairs, 5,667 (3.49 %) of the children were diagnosed with ID between birth and 3-years of age. After adjustment for covariates the independent relationship between DM and ID was significant with odds ratio of 1.10 (1.01-1.12). On sub-analysis, patients with pre-pregnancy DM had the highest effect measure with an estimated odds ratio of 1.32 (0.84, 2.09), although this was not statistically significant. In this large cohort of mothers and children in South Carolina, we found a small but statistically significant increased risk for ID among children born to mothers with DM. Additional information about the association between maternal DM and risk of ID in children may lead to the development of effective preventive interventions on the individual and public health levels.