Objective: The proinsulin to C-peptide (PI:C) ratio is reputedly a biomarker of β-cell endoplasmic reticulum (ER) stress. Objective: This study examined the natural history of the PI:C ratio and its correlation with residual β-cell function in childhood new-onset type 1 diabetes (T1D). Over the first year of T1D, the temporal trend in fasting and nutrient-stimulated PI data is limited. Methods: PI was a secondary pre-planned analysis of our 1-year, randomized, double-blind, placebo-controlled gamma aminobutyric acid (GABA) trial in new-onset T1D. Of the 99 participants in the primary study, aged 4 to 18 years, 30 were placebo. This study only involved the 30 placebo patients; all were enrolled within 5 weeks of T1D diagnosis. A liquid mixed meal tolerance test was administered at baseline and 5 and 12 months for determination of C-peptide, PI, glucose, and hemoglobin A1C. Results: Both the fasting (P = 0.0003) and stimulated (P = 0.00008) PI:C ratios increased from baseline to 12 months, indicating escalating β-cell ER stress. The baseline fasting PI correlated with the fasting change in C-peptide at 12 months (P = 0.004) with a higher PI correlating with greater decline in C-peptide. Patients with an insulin-adjusted A1C >9% (hence, not in remission) had higher fasting PI:C ratios. Younger age at diagnosis correlated with a higher PI:C ratio (P = 0.04). Conclusion: Children with new-onset T1D undergo progressive β-cell ER stress and aberrant proinsulin processing, as evidenced by increasing PI:C ratios. Moreover, the PI:C ratio reflects more aggressive β-cell onslaught with younger age, as well as diminished glycemic control.