Aims: Our aim was to synthesize current evidence on the association between parental smoking and incidence of type 1 diabetes and islet autoantibody positivity (IA) in the offspring by conducting a systematic review and meta‐analysis. Methods: We searched Medline, Embase, and Cochrane Library until January 21, 2021, for human studies with parental tobacco use as exposure, type 1 diabetes or IA as outcome, and hazard, risk, or odds ratios as effect estimates. Summary relative risks (RR) and 95% confidence intervals (CI) were estimated with random‐effects models. Heterogeneity was quantified with the I2 statistic, bias with the ROBINS‐I tool, and the certainty of evidence with the GRADE tool. Results: We identified 535 records of which 23 were eligible including 25 927 cases of type 1 diabetes. Maternal smoking during pregnancy was associated with a reduced risk of type 1 diabetes (n = 22, RR 0.78, CI 0.71–0.86, I2=69%). Including only studies with low to moderate risk of bias indicated similar results with less heterogeneity (n = 14, RR 0.73, CI 0.68–0.79, I2 = 44%). The certainty of evidence was graded as high. There was no clear association between type 1 diabetes and neither maternal (n = 6, RR 0.95, CI 0.78–1.14, I2 = 0%) nor paternal (n = 6, RR 0.90, 0.70–1.17, I2 = 68%) smoking during childhood. Furthermore, the association between maternal smoking during pregnancy and IA was weak (n = 4, RR 0.86, CI 0.44–1.65, I2 = 71%). Conclusions: Maternal smoking during pregnancy may reduce the risk of type 1 diabetes in the offspring. Further studies are needed to elucidate potential mechanisms underlying this association. Registration: Prospero CRD42021236717. [ABSTRACT FROM AUTHOR]