Background Type 1 diabetes (T1D) can have a negative effect on family functioning, which is associated with deterioration in metabolic control. Therefore, a valid tool for assessing family functioning is clinically relevant. We assessed the quality and validity of the Danish general functioning (GF) subscale of the family assessment device (FAD). Additionally, we investigated GF scores among adolescents with T1D and their parents and the relationship between family functioning and background variables, including metabolic control. Methods All Danish families with a child diagnosed with T1D (N = 1997) were invited to participate in a web‐based survey. In total, 616 adolescents (aged 12‐17 years) and 1035 parents (of children aged 2‐17 years) responded. The quality and validity of measurements made using the GF subscale were assessed using the Rasch model and graphical log‐linear Rasch models (GLLRMs). Differences among GF responses were also assessed using GLLRMs. The relationships between GF scores and background variables were examined by multivariate analyses. Results A dichotomized version of the GF subscale provided essentially valid measures of family functioning. Furthermore, the GF subscale measured family functioning most accurately in families with worse family functioning than in our population. To accurately characterize family functioning, it is important to take both parent's and adolescent's perceptions into account. Family functioning was associated with glycated hemoglobin (HbA1c) levels, and discrepancies in family functioning were associated with higher HbA1c levels. Conclusions A dichotomized GF subscale is useful for assessment of family functioning. Parent's and adolescent's scores should be kept separate. Family functioning is associated with HbA1c levels.