We investigated urinary N-acetyl-beta-D-glucosaminidase (NAG) levels in children with type 1 diabetes as an early marker of tubular damage and studied its correlation with microalbuminuria and glycaemic control. The study group comprised 42 children with type 1 diabetes and 20 healthy children as control. Urinary NAG to urinary creatinine ratio, microalbuminuria, glycated haemoglobin (Hb A1c), blood urea and serum creatinine were estimated. Urinary NAG levels in the children with diabetes were significantly higher than those of controls. There were positive correlations between urinary NAG levels and microalbuminuria, Hb A1c and systolic and diastolic blood pressure values. We found that 59.5% of diabetic children were positive for urinary NAG, while 38.1% of them were positive for microalbuminuria.