Exposure to maternal type 1 diabetes (T1D) during pregnancy provides relative protection against T1D in the offspring. This protective effect may be driven by epigenetic mechanisms. Here we conducted an epigenome-wide blood analysis on 790 young children with and 962 children without a T1D-affected mother, and identified differential DNA methylation (q < 0.05) at multiple loci and regions. These included the Homeobox A gene cluster and 15 T1D susceptibility genes. The differential methylation was found in transcriptionally relevant regions associated with immune function, including sites previously linked to T1D-related methylation loci and protein biomarkers. Propensity scores for methylation at T1D susceptibility loci could predict the development of islet autoimmunity in offspring born to mothers without T1D. Together, these findings highlight pathways through which maternal T1D may confer protection against islet autoimmunity in offspring and suggest that environmental factors can influence T1D risk through epigenetic modifications of T1D susceptibility loci.