We report a case of type 1 diabetes onset and recurrence of Graves' disease during pegylated interferon (PEG-IFN)-alpha plus ribavirin treatment for chronic hepatitis C. The patient was a 55-year-old woman diagnosed with chronic hepatitis at age 46 years. She was treated for Graves' disease at 50 years of age. Because Graves' disease remitted, PEG-IFN-alpha plus ribavirin treatment was started for chronic hepatitis C. She was examined because of complaints of general fatigue, weight loss, and palpitations after 24 weeks of the treatment. She was diagnosed with a recurrence of Graves' disease, and methimazole treatment was started. However, she complained of malaise, thirst, polyuria, and loss of body weight. Her fasting blood glucose level was 292 mg/dL and HbA1c was 9.3%. Serum anti-GAD (glutamic acid decarboxylase) antibodies were 2.2 U/mL. She was diagnosed with type 1 diabetes with ketosis, and insulin treatment was started. Serum anti-GAD antibodies gradually increased to 15.1 U/mL. Graves' disease and type 1 diabetes are often complicated, and the coincidental occurrence of these 2 diseases is known as autoimmune polyglandular syndrome type III. However, only a few cases have shown that these diseases occur after IFN treatment.