It has been proposed that type 1 diabetes (T1D) and leukemia in children may cluster in space and time due to common spatially mediated etiologies. We investigated this hypothesis and clustering of both diseases separately in Danish children aged 0-14 years, using 1,168 leukemia cases diagnosed in the period 1980-2006, 2,443 T1D cases diagnosed 1996-2006, and population-based controls matched on age, gender, and time of diagnosis. Residential histories from birth to diagnosis were collected. For leukemia in ages 0-14 years, we found no evidence of clustering; we did find spatial clustering at time of diagnosis for children aged 2-6 years with acute lymphoblastic leukemia (ALL) (observed/expected [95% confidence interval]: 1.35 [1.15-1.54]). T1D cases showed clustering at birth for ages 0-14 years; for ages 0-4 years at diagnosis, and when the residential history was accounted for. T1D cases clustered near leukemia cases particularly in the age group 2-6 years at diagnosis. Leukemia and T1D in this age group thus may share etiological factors mediated by geographic location. This suggests common environmental risk factors, with exposure to infections as first possible candidate, geographically localized exposure to agents that compromise development and/or response of the immune system being a second, and chance being a third.