To determine whether, in children with newly diagnosed type 1 diabetes who were not acutely unwell, management at home for initiation of insulin treatment and education of the child and family, would result in improved clinical and psychological outcomes at 2 years postdiagnosis.A multicentre randomised controlled trial (January 2008/October 2013).Eight paediatric diabetes centres in England, Wales and Northern Ireland.203 clinically well children aged under 17 years, with newly diagnosed type 1 diabetes and their carers.Management of the initiation period from diagnosis at home, for a minimum of 3 days, to include at least six supervised injections and delivery of pragmatic educational care.Primary outcome was glycosylated haemoglobin (HbA1c) concentration at 24 months postdiagnosis. Secondary outcomes included coping, anxiety, quality of life and use of NHS resources.203 children, newly diagnosed, were randomised to commence management at home (n=101) or in hospital (n=102). At the 24 month primary end point, there was one withdrawal and a follow-up rate of 194/202 (96%). Mean HbA1c in the home treatment arm was 72.1 mmol/mol and in the hospital treated arm 72.6 mmol/mol. There was a negligible difference between the mean HbA1c levels in the two arms adjusted for baseline (1.01, 95% CI 0.93 to 1.09). There were mostly no differences in secondary outcomes at 24 months, apart from better child self-esteem in the home-arm. No home-arm children were admitted to hospital during initiation and there were no adverse events at that time. The number of investigations was higher in hospital patients during the follow-up period. There were no differences in insulin regimens between the two arms.There is no evidence of a difference between home-based and hospital-based initiation of care in children newly diagnosed with type 1 diabetes across relevant outcomes.ISRCTN78114042.