The aim of the study was to investigate the incidence of type 1 diabetes among children aged 14 years or under according to the level of urbanization of the place of residence of children at the time of diagnosis in Finland during 1987 to 1996. The analysis was carried out using a Bayesian approach and GIS. The incidence was the highest in the rural heartland areas while the increase in incidence was sharpest in urban areas. The level of urbanization seems to explain only a part of the spatial variation in the incidence in Finland. It is possible that some environmental risk factors for type 1 diabetes have been more prevalent in rural heartland areas than in the rest of the country. These factors might have increased in urban environments in Finland particularly during the first half of 1990s.