More than a quarter missed a dose every week.
Most admitted reducing their insulin dose in a risky bid to lose weight and gain control over their body.
The most common ages for this to happen are 18 and 19.
Dr Ralph Audehm from Diabetes Australia says it is because young people are so concerned about the way they look.
"This is not so much about an image issue but it's actually a mental health issue and we need to tackle it," he said.
He warns that skipping or reducing an insulin dose can lead to long-term health problems.
"People who omit or don't take sufficient insulin often will have worse control and we know that worse control of diabetes leads to serious consequences, which are things like blindness, kidney disease and heart disease," he said.
Professor Jonathan Shaw, associate director of the Baker IDI Heart and Diabetes Institute in Melbourne, said skipping insulin to aid weight loss was a common problem, especially among young female diabetics.
"The worry is that without insulin, blood glucose levels rise, and that leads to complications like heart disease, eye disease and kidney problems," Prof Shaw said.
"So misusing the medication comes with heavy costs to your health and wellbeing."
Results also showed only 12 per cent of people with type one diabetes had ever had a healthcare professional directly ask them if they were skipping or restricting insulin as a means of losing weight.
The Insulin Misuse for Weight Loss research survey of about 250 people was funded by a pharmaceutical company that supplies insulin.
About 140,000 Australian children and adults have the condition, which requires daily insulin injections to control their blood glucose levels because the body does not produce it naturally, AAP reported.