Clinical use of near-continuous glucose monitors (CGMs) could have substantial impact on family management of pediatric type 1 diabetes and could generate both beneficial and adverse psychological reactions. In addition to glycemic benefits, CGM could possibly yield educational and motivational benefits. Conversely, CGM may also lead to information overload and increased treatment burden. Further, patients and families with certain affective, behavioral, and cognitive characteristics might derive greater benefit from CGM use. As information about these processes could facilitate optimal clinical use of CGM, the Diabetes Research in Children Network (DirecNet) included measurement of selected psychological variables in a recent randomized trial of the GlucoWatch G2 Biographer (GW2B, Cyngus, Inc., Redwood City, CA, USA). A multicenter sample of 200 youths with type 1 diabetes was randomized to 6 months of either continued usual care (UC) using a conventional home glucose meter for diabetes or supplementation of standard care with use of the GW2B. Diabetes treatment adherence, diabetes-specific quality of life, and diabetes-related anxiety were measured at baseline and at the end of the study. Satisfaction with use of the GW2B was measured at the end of the study. The results indicated neither adverse nor beneficial psychological effects of CGM use. More frequent GW2B use over the 6-month study was found among youths whose parents reported higher scores for treatment adherence and diabetes-related quality of life at baseline. The study illustrates the empiric assessment of the psychological context of CGM use and establishes methods that are applicable to new CGM devices as they emerge.