Increases in both phototherapy use and the incidence of type 1 diabetes mellitus (DM-1) have been reported. One large study has suggested a strong association between them. Our objective was to quantify any association between neonatal phototherapy and DM-1 in a northern California integrated health care system. This retrospective cohort study included 499 642 children born at ≥35 weeks’ gestation in 15 Kaiser Permanente Northern California hospitals from 1995 to 2011 and followed until March 31, 2014. We ascertained phototherapy, bilirubin levels, and other covariates from electronic records. We identified DM-1 cases using a diabetes registry and inpatient and outpatient diagnoses. We used traditional and propensity-adjusted Cox models to quantify associations. Phototherapy use increased from 2.7% in 1995 to 16.0% in 2011. DM-1 was diagnosed in 37 of 39 406 children who had received phototherapy (15.1 per 100 000 person-years; mean follow-up 6.2 years) and 712 of 460 236 who had not (18.8 per 100 000 person-years; mean follow-up 8.2 years). There was no evidence of increasing diabetes incidence. We found no association between phototherapy and DM-1 in either unadjusted analyses (incidence rate ratio 0.81; 95% confidence interval, 0.56 to 1.12) or analyses adjusted for hyperbilirubinemia and other covariates (hazard ratio 1.06; 95% confidence interval, 0.78 to 1.45). DM-1 incidence was most strongly associated with race and ethnicity, with whites at highest risk (25.6 per 100 000) and Asians at lowest risk (8.9 per 100 000). We found no evidence of increased DM-1 risk in children who had received phototherapy.