Near-infrared spectroscopy (NIRS) is a noninvasive technique for assessing cerebral hemodynamic variables and oxidative status in the neonatal intensive care setting. It can be performed for extended periods of time at the bedside without interfering with routine patient care. NIRS appears to have the ability to not only assess relative changes in oxygenated and deoxygenated hemoglobin, total hemoglobin, and cytochrome aa3, but it can also produce estimates of cerebral blood volume and cerebral blood flow. Research data document significant changes in these hemodynamic variables with patient activity and clinical interventions in both premature and term infants. NIRS may evolve into an important diagnostic and prognostic tool for neonatal neurologic outcome.