Diabetes mellitus (DM) is associated with a variety of sensory complications. Very little attention has been given to auditory neuropathic complications in DM. Three studies were designed to determine whether type 1 DM affects neural coding of the rapid temporal fluctuations of sounds, and how any deficits may impact on real-world listening tasks. Participants were 30 young normal-hearing type 1 DM patients, and 30 age-, sex-, and audiogram-matched healthy controls. The study in Chapter 4 used non-invasive electrophysiological measures of auditory nerve (AN) and brainstem function using the click-evoked auditory brainstem response (ABR), and of brainstem neural temporal coding using the sustained frequency-following response (FFR). There were no significant differences between DM patients and controls in the ABR. However, the DM group showed significantly lower FFR responses. The results of the study in Chapter 4 demonstrate that type 1 DM can impair phase locking to the temporal envelope and temporal fine structure (TFS) in the absence of a reduction in hearing sensitivity as measured by PTA and that FFR may provide an early indicator of neural damage in DM, before any abnormalities can be identified using standard clinical tests. In Chapter 5, behavioural tests of temporal coding (interaural phase difference, IPD, discrimination and the frequency difference limen, FDL), as well as tests of speech perception in noise were conducted. The DM group showed significantly higher IPD and FDL thresholds, as well as worse speech-in-noise performance. In Chapter 6, the Speech, Spatial and Qualities (SSQ) hearing scale was used to determine whether type 1 DM is associated with self-report of auditory disability in the absence of an elevation in audiometric threshold. The DM group had significantly lower overall SSQ scores and consistently reported significantly more difficulties than the control group on the Speech, Spatial and Qualities subscales. Overall, the findings of the studies in this thesis suggest that type 1 DM is associated with degraded neural temporal coding in the brainstem in the absence of an elevation in audiometric threshold, and that this deficit may impact on real-world hearing ability.