The neurodevelopmental outcome of 78 infants with bronchopulmonary dysplasia (BPD) was compared with that of 78 control infants matched for birthweight. To determine the effect of the severity of BPD, 62 infants requiring oxygen at 36 weeks' postmenstrual age (sBPD) were compared with their matched controls. Infants were followed up to 2 years of age, corrected for prematurity, and were classified for neurological impairment, developmental delay, and neurodevelopmental disability. Seventy six (98%) BPD infants and 71 (91%) controls had follow up data available to two years. Neurological impairment, developmental delay, and neurodevelopmental disability occurred more frequently in infants with BPD than in controls but this was not significant. For infants with sBPD, the increased incidence of neurological impairment and definite developmental delay was not significant when compared with the controls, though neurodevelopmental disability occurred more frequently (odds ratio (OR) 3.6: 95% confidence intervals (CI) 1.1-11.8). Predictors of disability in infants with sBPD included periventricular haemorrhage (OR 19.4: 95% CI 4.3-86.6), ventricular dilatation (OR 12.8: 95% CI 2.9-57.3), and sepsis (OR 5.0: 95% CI 1.3-19.4). Adjusting for the presence of these factors, the association between BPD and disability was no longer apparent (OR 0.9: 95% CI 0.2-3.6). The findings suggest that BPD is not independently associated with adverse neurodevelopmental outcome.