The systematic registration of the incidence of childhood (0-14 yr) type 1 (insulin-dependent) diabetes mellitus in Bulgaria dates back to 1973, with an invariably present difference in the incidence according to the area of residence. The present study has been undertaken to assess the trends in the incidence of type 1 diabetes among children in eastern Bulgaria (1982-1998) with respect to area of residence at onset. The data were collected prospectively, with an ascertainment of the primary source of 95.8%. The mean annual incidence is 6.99/100,000 (95% CI = 6.45-7.54), varying between 5.09 and 11.54/100,000. The mean annual incidence in towns is higher than in villages: 7.89 vs. 5.26/100,000, p < 0.0001. A linear trend of increase in the incidence with time is revealed applying Poisson regression analysis, with the area of residence as a strong predictor of the risk (p < 0.001). According to the model, the age-adjusted incidence rose by 4.1% annually. The stratified analysis by age group has found a significant linear trend in those aged 5-9 (p < 0.001) and 10-14 yr (p = 0.002) for both sexes. In conclusion, the markedly increasing incidence of type 1 diabetes among children in this study is strongly dependent on area of residence at onset. We suggest that in conjunction with the pronounced seasonality at the onset of diabetes and its connection with population density, this phenomenon should be regarded as a reflection of environmental influence and further explored.