Insulin-dependent diabetes (IDDM) is frequently associated with autoimmune thyroid disease (ATD) within families. In these families, HLA polymorphism may modulate the susceptibility to each disease. Families with IDDM were further categorized as to the presence of ATD. IDDM-affected subjects from families without ATD were compared with subjects with ATD or with IDDM and ATD from IDDM/ATD families and with a control group. IDDM susceptibility in IDDM/ATD families was negatively associated with the presence of DQB1*0602 [relative risk (RR) = 0.038; P = 0.0001; corrected P (Pc) = 0.0005] and *0301 (RR = 0.3; P = 0.002; Pc = 0.01) and positively associated with the presence of DQB1*0201 (RR = 3.4; P = 0.0007; Pc = 0.0035) and *0302 (RR = 5; P = 0.0001; Pc = 0.0005), regardless of ATD. Compared with the IDDM-only group, the ATD-only group had an increased frequency of subjects with DQB1*0602 (RR = 0.14; P = 0.031), suggesting that the known IDDM-protective effect of this allele may be independent of susceptibility to ATD; however, this difference was not significant when the P value was correlated for the number of alleles tested. In these families, susceptibility to ATD was only associated with DQB1*0201 (RR = 5.71; P = 0.0043; Pc = 0.021). Among subjects with DQB1*0201, there was a weak negative association between the presence of DQB1*0302 on the second haplotype and Hashimoto's thyroiditis (RR = 0.237; P = 0.026; Pc > 0.05). We conclude that in IDDM/ATD families, IDDM-affected subjects are at risk for ATD, especially those carrying DQB1*0201. This risk may be influenced by the alleles carried on the second haplotype, with DQB1*0302 (or a closely linked gene) protecting from Hashimoto's thyroiditis and favoring Graves' disease.