The SEARCH Nutrition Ancillary Study aims to investigate the role of dietary intake on the development of long-term complications of type 1 diabetes in youth, and capitalise on measurement error (ME) adjustment methodology. Using the National Cancer Institute (NCI) method for episodically consumed foods, we evaluated the relationship between sugar-sweetened beverage (SSB) intake and cardiovascular risk factor profile, with the application of ME adjustment methodology. The calibration sample included 166 youth with two FFQ and three 24 h dietary recall data within 1 month. The full sample included 2286 youth with type 1 diabetes. SSB intake was significantly associated with higher TAG, total and LDL-cholesterol concentrations, after adjusting for energy, age, diabetes duration, race/ethnicity, sex and education. The estimated effect size was larger (model coefficients increased approximately 3-fold) after the application of the NCI method than without adjustment for ME. Compared with individuals consuming one serving of SSB every 2 weeks, those who consumed one serving of SSB every 2 d had 3·7 mg/dl (0·04 mmol/l) higher TAG concentrations and 4·0 mg/dl (0·10 mmol/l) higher total cholesterol and LDL-cholesterol concentrations, after adjusting for ME and covariates. SSB intake was not associated with measures of adiposity and blood pressure. Our findings suggest that SSB intake is significantly related to increased lipid levels in youth with type 1 diabetes, and that estimates of the effect size of SSB on lipid levels are severely attenuated in the presence of ME. Future studies in youth with diabetes should consider a design that will allow for the adjustment for ME when studying the influence of diet on health status.