Peripheral neuropathy is a major consequence of diabetes mellitus with up to 50 % of patients showing clinically significant neural injury during the disease course. Hearing loss (as defined by impaired sound detection thresholds) is a recognized symptom of DM, but the possibility of auditory neuropathy (AN) has not been explored in this population. This pilot study investigated peripheral auditory function, auditory processing and speech perception in individuals with Type 1 diabetes mellitus (T1DM) and compared the findings with measures of vestibular function, ocular pathology/visual acuity and overall neurologic profile. Ten adults with T1DM and ten matched controls underwent a battery of tests which included: audiometry, otoacoustic emissions, auditory brainstem responses, temporal processing measures and speech perception. Six of the ten T1DM participants showed electrophysiologic evidence of AN and impaired functional hearing. Furthermore, auditory capacity was correlated with both visual acuity and degree of somatic peripheral neuropathy. This pilot investigation revealed functional-hearing deficits severe enough to impact upon everyday communication. Should the findings be confirmed by larger studies, auditory evaluation may form an important part of the management regimen for individuals with T1DM. This may be especially important for those with DM-related eye conditions, as deficits across multiple sensory modalities can have multiplicative detrimental effects on quality-of-life.