The purpose of this study was to explore the psychosocial predictors of diabetes self‐care (adherence to care regimes), metabolic control (glycated haemoglobin), and mental health among rural‐ and urban‐dwelling youth with type 1 diabetes. One hundred and twenty three adolescents/young adults (aged 13−25 years, mean = 16 years, standard deviation = 3.8 years) with type 1 diabetes, 50 males and 73 females, completed questionnaires reporting on diabetes self‐care, metabolic control, mental health (negative affect, quality of life), risk‐taking behaviours and attitudes, diabetes self‐efficacy, community engagement, and perceived social support. No rural/urban differences were detected on key predictors or outcome variables. Structural equation modelling revealed that high diabetes self‐efficacy, lower risk behaviour, and more conservative attitudes to risk taking predicted better diabetes self‐care, which in turn predicted better metabolic control and mental health. Social support and engagement in community activities did not influence diabetes self‐care. The study has significance because both diabetes self‐efficacy and propensity towards risk behaviour are potential targets for educational and counselling interventions designed to improve diabetes self‐care regimes and resultant metabolic and mental health outcomes.