Published data on the role of neonatal jaundice as a risk factor for childhood type 1 diabetes mellitus is inconsistent. We aimed to review systematically, the evidence for an increased risk of type 1 diabetes in children diagnosed with neonatal jaundice. A comprehensive search of the published literature was performed to identify studies that had recorded the occurrence of neonatal jaundice in a group of children with type 1 diabetes and in a group of control children. Odds ratios (ORs) were extracted from reports or derived from tabulated data and then combined using a random effects meta-analysis. Data were available from 12 case–control studies and one retrospective cohort study. Overall, there was only weak evidence of an increase in the risk of type 1 diabetes in children who had neonatal jaundice (OR 1.14, 95% CI 0.99–1.32; P = 0.07), and there was some evidence of heterogeneity (I2 = 53%, P = 0.01) mainly attributable to one study. An analysis restricted to studies not relying on parental recall showed a stronger, significant relationship (OR = 1.25, 95% CI 1.03–1.51; P = 0.02), although heterogeneity remained. This analysis found evidence of a small but statistically significant increase in childhood type 1 diabetes risk associated with neonatal jaundice but only for studies which used data from obstetric records. Jaundice caused by blood group incompatibility or requiring phototherapy may be associated with a greater increase in type 1 diabetes risk and deserves further study.