Aims  To determine the national incidence of Type 1 diabetes in children aged 0–14 years and examine trends in incidence between 2000 and 2006 by age, sex and calendar year.

Methods  Case ascertainment was from the Australian National Diabetes Register, a prospective population‐based incidence register established in 1999, with two sources of ascertainment: the National Diabetes Services Scheme and the Australasian Paediatric Endocrine Group’s state‐based registers. Denominator data were from the Australian Bureau of Statistics.

Results  There were 6350 new cases of Type 1 diabetes (3323 boys and 3027 girls). Case ascertainment was 97.1% complete using the capture–recapture method. The mean adjusted incidence rate for 2000–2006 was 21.6 per 100 000 person‐years [95% confidence interval (CI) 21.0, 22.1], and increased from 19.8 in 2000 to 23.4 per 100 000 in 2006, an average increase of 2.8% (95% CI 1.5, 4.1) per year. Mean incidence for the 7‐year period increased with age, and was significantly higher in boys aged 0–4 years and 10–14 years than in girls of the same age.

Conclusions  The incidence of Type 1 diabetes among 0–14‐year‐olds in Australia is very high compared with available data from many other countries. The rate of increase observed globally in the last decade has continued well into this decade in Australia. The rising incidence cannot be explained by changes in genetic susceptibility; there is an urgent need to examine the environmental factors that have contributed to this increase. The findings of this study also have important implications for resource planning.