We describe a prospective 10-year study of insulin secretion and immunologic changes in a group of children with celiac disease (CD) on a gluten-free diet. Thirty CD patients aged 4-16 years and 30 matched controls were examined. They underwent i.v. glucose tolerance test during which glucose disappearance rate (K) and first phase insulin response (FPIR) were measured. Typing for HLA A, B, C, and DR antigens was performed and sera were analyzed for cytoplasmic islet cell antibodies (ICA) on several occasions. Pancreatic isoamylase (PIA) was measured to assess exocrine pancreatic function. In 4/21 CD children, FPIR and K rate were decreased. There was a significant correlation between the two parameters (p < 0.01). The incidence of HLA B8 and DR3 was higher in CD (33% and 60%, respectively) than in healthy individuals (p < 0.001). All patients were found to be ICA negative at the time of the study and at follow-up. There was no correlation between parameters of endocrine (FPIR, K) and exocrine (PIA) pancreatic function. One out of four children with reduced FPIR developed overt DM during the study. In conclusion, the decline of first phase insulin secretion documented in CD patients is unrelated to jejunal morphology or exocrine pancreatic function. This decline may be an expression of a prediabetic phase as observed in one of the subjects who finally developed IDDM. HLA B8 and DR3, which are detected in celiac patients, may indicate a possible common pathogenic mechanism between CD and IDDM.