In patients with type 1 diabetes, measurement of connecting peptide (C-peptide), cosecreted with insulin from the islets of Langerhans, permits estimation of remaining β-cell secretion of insulin. In this retrospective analysis to distinguish the incremental benefits of residual β-cell activity in type 1 diabetes, stimulated (90 min following ingestion of a mixed meal) C-peptide levels at entry in the Diabetes Control and Complications Trial (DCCT) were related to measures of diabetic retinopathy and nephropathy and to incidents of severe hypoglycemia. Based on the analytical sensitivity of the assay (0.03 nmol/l) and study entry criteria, the DCCT subjects were divided into four groups of stimulated C-peptide responses: ≤0.03, 0.04-0.20, 0.21-0.50 nmol/l at entry, and 0.21-0.50 nmol/l at entry and at least 1 year later (sustained C-peptide secretion). Uniformly in the intensive and partially in the conventional DCCT treatment groups, any C-peptide secretion, but especially at higher and sustained levels of stimulated C-peptide, was associated with reduced incidences of retinopathy (both a single three-step change and a repeated three-step change on the Early Treatment of Diabetic Retinopathy Study [ETDRS] scale at the next 6 month visit) and nephropathy (both albuminuria >40 mg/24 h once and repeated at the next annual visit). There were also differences in severe hypoglycemia across C-peptide levels in both treatment groups. In the intensively treated cohort there were essentially identical prevalences of severe hypoglycemia (∼65% of participants) in the first three groups; however, those subjects with mixed-meal stimulated C-peptide level >0.20 nmol/l for at least baseline and the first annual visit in the DCCT experienced a reduced prevalence of ∼30%. Therefore, even modest levels of γ-cell activity at entry in the DCCT were associated with reduced incidences of retinopathy and nephropathy. Also, continuing C-peptide (insulin) secretion is important in avoiding hypoglycemia (the major complication of intensive diabetic therapy).