The epsilon4 allele of the apolipoprotein-E (APOE) gene is associated with poor outcome following various cerebral insults. The relationship between APOE genotype and cognitive function in patients with type 1 diabetes is unknown. In a cross-sectional study of 96 people with type 1 diabetes, subjects were APOE genotyped, previous exposure to severe hypoglycemia was estimated by questionnaire, and cognition was assessed by neuropsychological testing. Cognitive abilities were compared using multivariate general linear modeling (multiple analysis of covariance, MANCOVA) in those with (n = 21) and without (n = 75) the APOE epsilon4 allele. APOE epsilon4 selectively influenced cognitive ability in a sex-specific manner (F = 2.3, P = 0.044, Eta(2) = 0.15); women with APOE epsilon4 performed less well on tests of current, nonverbal intellectual ability (Wechsler Adult Intelligence Scale-Revised performance test score, P = 0.001, Eta(2) 0.26) and frontal lobe and executive function (Borkowski verbal fluency, P = 0.016, Eta(2) = 0.15). Previous exposure to severe hypoglycemia did not interact with APOE epsilon4 to produce cognitive disadvantage. The APOE epsilon4 genotype is associated with specific cognitive disadvantage in young women with type 1 diabetes. APOE epsilon4 is unlikely to mediate susceptibility to hypoglycemia-induced cognitive disadvantage.