Study Objectives: Accurate objective measurement of sleep, an important health behavior, is needed. Individuals with type 1 diabetes mellitus (T1DM) have altered sleep architecture and reduced sleep quality in comparison with healthy controls. The aim of this investigation was to compare a commonly used actigraphy device, Actiwatch2, with polysomnography (PSG)-based measures of sleep in young adults with T1DM, and to determine which Actiwatch2 threshold setting provides the best correspondence. Methods: Subjects age 18-30 years with T1DM wore the Actiwatch2 while simultaneously undergoing in-laboratory PSG. Sleep parameters were derived from the Actiwatch2 using the three different sensitivity thresholds (low, medium, and high) provided by the manufacturer and compared with sleep parameters from PSG. Statistical analysis included intraclass correlation coefficients and Bland-Altman plots for comparison of sleep parameters. Cohen kappa and the prevalence-adjusted and bias-adjusted kappa (PABAK) were calculated to determine agreement between epoch-by-epoch sleep and wake data measured by the PSG versus Actiwatch2. Results: Twenty-seven subjects were included in the analysis. The low threshold setting provided the greatest agreement and least bias in comparison with PSG for sleep parameters (intraclass correlation coefficient range 0.38 to 0.77). Mean differences between the low setting and PSG were nonsignificant (P > .65) for all sleep parameters except sleep onset latency (P = .04). All three settings provided approximately equivalent and moderate epoch-by-epoch agreement with the PSG (PABAK coefficients ranging from 0.56 to 0.63). Conclusions: When measuring sleep with the Actiwatch2 in young adults with T1DM, the low threshold setting provides the most accurate estimates of sleep parameters in comparison with PSG.