Type 1 diabetes is associated with chronic hyperglycemia and exposure to intermittent severe hypoglycemia. The long-term cerebral effects of these consequences of diabetes are ill defined. In this study, the history of preceding severe hypoglycemia and the presence of background retinopathy were examined in relation to cognitive ability (neuropsychological test battery) and brain structure (magnetic resonance imaging) in a cross-sectional evaluation of 74 young people with type 1 diabetes. Participants differed by their severe hypoglycemia exposure and degree of diabetic retinopathy and none had previous neuropsychological pathology. Severe hypoglycemia did not influence cognitive ability or brain structure. Background diabetic retinopathy was associated with small focal white-matter hyperintensities in the basal ganglia (33.3 vs. 4.7%, after correction for age, P = 0.005) and significant cognitive disadvantage, affecting fluid intelligence (P = 0.008, Eta(2) = 0.14), information processing (P = 0.001, Eta(2) = 0.22), and attention and concentration ability (P = 0.03, Eta(2) = 0.09). In conclusion, recurrent exposure to severe hypoglycemia alone in young people with type 1 diabetes had no detrimental impact on brain structure or function over the duration of diabetes examined. Chronic hyperglycemia (inferred by the presence of background diabetic retinopathy) may affect brain structure and function.