Background: The protein tyrosine phosphatase nonreceptor type 2 (PTPN22) has been established as a type 1 diabetes susceptibility gene. A recent study found the C1858T variant of this gene to be associated with lower residual fasting C-peptide levels and poorer glycemic control in patients with type 1 diabetes. We investigated the association of the C1858T variant with residual beta-cell function (as assessed by stimulated C-peptide, proinsulin and insulin dose-adjusted HbA(1c)), glycemic control, daily insulin requirements, diabetic ketoacidosis (DKA) and diabetes-related autoantibodies (IA-2A, GADA, ICA, ZnT8Ab) in children during the first year after diagnosis of type 1 diabetes. Methods: The C1858T variant was genotyped in an international cohort of children (n = 257 patients) with newly diagnosed type 1 diabetes during 12 months after onset. We investigated the association of this variant with liquid-meal stimulated beta-cell function (proinsulin and C-peptide) and antibody status 1, 6 and 12 months after onset. In addition HbA1c and daily insulin requirements were determined 1, 3, 6, 9 and 12 months after diagnosis. DKA was defined at disease onset. Results: A repeated measurement model of all time points showed the stimulated proinsulin level is significantly higher (22%, p = 0.03) for the T allele carriers the first year after onset. We also found a significant positive association between proinsulin and IA levels (est.: 1.12, p = 0.002), which did not influence the association between PTPN22 and proinsulin (est.: 1.28, p = 0.03). Conclusions: The T allele of the C1858T variant is positively associated with proinsulin levels during the first 12 months in newly diagnosed type 1 diabetes children