Aim: The objective of this study was to investigate low-grade inflammation in children with type 1 diabetes (T1D) and its association with cortisol levels as well as its bioavailability through 11β-hydroxy steroid dehydrogenase type 1 (11β-HSD1) activity. Methods: Children with T1D (n = 45) and their non-diabetic siblings (n = 28) participated in the study. Interleukin-6 (IL-6) and high-sensitivity C-reactive protein (CRPhs) were measured between 1400 and 1800 h. Glucocorticoid metabolites were measured in the first morning urine on clinic day and 11β-HSD1 activity was estimated by tetrahydrocortisol/tetrahydrocortisone (THF/THE) ratio. Results: Diabetic patients presented with an increased THF/THE ratio compared with controls (median: 0.68 [range: 0.45–1.18] vs 0.45 [0.27–0.98], respectively; P < 10–3). There was no difference between diabetic patients and controls for IL-6 (0.6 ng/mL [0.6–6.8] vs 0.6 [0.6–2.2], respectively; P = 0.43) and CRPhs (0.4 mg/L [0–7.4] vs 0.3 [0–8.2]; P = 0.26, respectively). When adjusted for age, gender and BMI, the THF/THE ratio was significantly associated with CRPhs (β = 0.32, P = 0.02) in diabetic patients, but not in controls. Conclusion: Low-grade inflammation assessed by plasma CRPhs and IL-6 concentrations was not detectable in our cohort of T1D children. Nocturnal 11β-HSD1 activity was increased and associated with plasma CRPhs concentration in diabetic patients. These results may be explained by either a direct or inflammation-mediated effect of the relative hepatic lack of insulin due to subcutaneous insulin therapy.