The cause of type 1 diabetes is not fully understood. Some theorize that type 1 diabetes is a virally triggered autoimmune response in which the immune system's attack virus infected cells along with the beta cells in the pancreas. The Coxsackie virus family or German measles is implicated, although the evidence is inconclusive. In type 1, pancreatic beta cells in the Islets of Langerhans are destroyed decreasing endogenous insulin production. This distinguishes type 1's origin from type 2 DM. The type of diabetes a patient has is determined only by the cause—fundamentally by whether the patient is insulin resistant (type 2) or insulin deficient without insulin resistance (type 1).

This vulnerability is not shared by everyone, for not everyone infected by the suspected organisms develops type 1 diabetes. This has suggested presence of a genetic vulnerability and there is indeed an observed inherited tendency to develop type 1. It has been traced to particular HLA genotypes, though the connection between them and the triggering of an auto-immune reaction is still poorly understood.

Some researchers believe that the autoimmune response is influenced by antibodies against cow's milk proteins. A large retrospective controlled study published in 2006 strongly suggests that infants who were never breastfed had a risk for developing type 1 diabetes twice that of infants who were breastfed for at least three months.The mechanism is not fully understood. No connection has been established between autoantibodies, antibodies to cow's milk proteins, and type 1 diabetes. A subtype of type 1 (identifiable by the presence of antibodies against beta cells) typically develops slowly and so is often confused with type 2. In addition, a small proportion of type 2 cases manifest a genetic form of the disease called maturity onset diabetes of the young (MODY).

Vitamin D in doses of 2000 IU per day given during the first year of a child's life has been connected in one study in Northern Finland (where intrinsic production of Vitamin D is low due to low natural light levels) with an 80% reduction in the risk of getting type 1 diabetes later in life. The causal connection, if any, is obscure.

Type 1 diabetes was previously known as juvenile diabetes because it is one of the most frequent chronic diseases in children; however, the majority of new-onset type 1 diabetes is seen in adults. Scientific studies that use antibody testing (glutamic acid decarboxylase antibodies (GADA), islet cell antibodies (ICA), and insulinoma-associated (IA-2) autoantibodies) to distinguish between type 1 and type 2 diabetes demonstrate that most new-onset type 1 diabetes is seen in adults. A 2008 book, “Type 1 Diabetes in Adults: Principles and Practice” (Informa Healthcare, 2008) says that adult-onset type 1 autoimmune diabetes is two to three times more common than classic childhood-onset autoimmune diabetes (p. 27). In type 1 diabetes, the body does not produce insulin. Insulin is a hormone that is needed to convert sugar (glucose), starches and other food into energy needed for daily life.

Some suggest that deficiency of Vitamin D3 (one of several related chemicals with Vitamin D activity) may be an important pathogenic factor in type 1 diabetes independent of geographical latitude, and so of available sun intensity.

Some chemicals and drugs preferentially destroy pancreatic cells. Pyrinuron (Vacor, N-3-pyridylmethyl-N'-p-nitrophenyl urea), a rodenticide introduced in the United States in 1976, selectively destroys pancreatic beta cells, resulting in type 1 diabetes after accidental or intentional ingestion. Vacor was withdrawn from the U.S. market in 1979, but is still used in some countries. Zanosar is the trade name for streptozotocin, an antibiotic and antineoplastic agent used in chemotherapy for pancreatic cancer; it also kills beta cells, resulting in loss of insulin production. Other pancreatic problems, including trauma, pancreatitis or tumors (either malignant or benign), can also lead to loss of insulin production.

The exact cause(s) of type 1 diabetes are not yet fully understood, and research on those mentioned, and others, continues.