Insulin-dependent diabetes mellitus (IDDM) is preceded by the presence of antibodies against islet proteins including a protein tyrosine phosphatase (PTP) designated IA-2. Recently, we cloned a novel PTP named IAR which shares 43% sequence identity with IA-2 and is recognised by antibodies from a majority of patients with IDDM. The aim of the present study was to determine whether IAR antibodies (IAR Ab) or IA-2 antibodies (IA-2 Ab) are associated with progression to IDDM in first-degree relatives "at-risk" for IDDM (operationally defined as those with islet cell antibodies [ICA] > or = 20JDFU or insulin autoantibodies [IAA] > or = 100 nU/ml), and to examine combinations of IAR Ab and IA-2 Ab in these subjects. The sensitivity and specificity of these antibodies were also examined in patients with recent-onset IDDM. Using Cox's Proportional Hazards Model, the number of siblings with IDDM was associated with progression to IDDM in "at-risk" relatives, but other covariables (age, sex, number of affected offspring or parents) were not significantly associated. Using number of affected siblings as a covariable, both IAR and IA-2 antibodies were significantly associated with progression to IDDM (p < 0.005). Combinations of both antibodies, however, did not result in a significantly stronger association with progression to IDDM. The threshold of positivity for IAR Ab (0.5 units) and IA-2 Ab (3.0 units) assays was adjusted to give the same specificity (97.9%) for each assay in 144 healthy control subjects, to allow standardised comparisons. Levels of IAR Ab and IA-2 Ab were strongly correlated in 53 recent-onset IDDM patients (r = 0.70, p < 0.0001) but 11.3% had IAR Ab in the absence of IA-2 Ab and 16.9% had IA-2 Ab in the absence of IAR Ab. The sensitivity for IDDM (defined as the proportion of IDDM patients positive) was 56.6% for IAR Ab and 62.3% for IA-2 Ab. We conclude that there is considerable overlap in IA-2 Ab and IAR Ab positivity, although either antibody can occur independently in IDDM patients. Both IAR Ab and IA-2 antibodies are associated with progression to IDDM in first-degree relatives at-risk of IDDM, but the use of IAR and IA-2 antibodies in combination are not significantly more strongly associated with progression than single antibodies. IAR Ab may play an important role in the prediction of IDDM.