Knowing the prognosis of epilepsy will undoubtedly influence the treatment strategy. This study aimed to define the prospects of newly diagnosed childhood epilepsy, assess the dynamics of its course, identify relevant variables and develop models to assess the individual prognosis. Four hundred and fifty-three children with newly diagnosed epilepsy were followed for 5 years. Terminal remission at 5 years (TR5) was compared with terminal remission at 2 years (TR2) and with the longest remission during follow-up. Variables defined at intake and at 6 months of follow-up were analysed for their prognostic relevance. In multivariate analyses, combinations of variables were tested to develop reliable models for the calculation of the individual prognosis. Data on treatment, course during follow-up and epilepsy syndromes were also studied. Three hundred and forty-five children (76%) had a TR5 >1 year, 290 (64%) >2 years and 65 (14%) had not had any seizure during the entire follow-up. Out of 108 children (24%) with TR5 <1 year, 27 were actually intractable at 5 years. Medication was started in 388 children (86%). In 227 of these (59%), anti-epileptic drugs (AEDs) could be withdrawn. A TR5 >1 year was attained by 46% on one AED, on the second AED by 19%, and by 9% on all additional AED regimes. Almost 60% of the children treated with a second or additional AED regime had a TR5 >1 year. Variables predicting the outcome at intake were aetiology, history of febrile seizures and age. For intake and 6-month variables combined, sex, aetiology, postictal signs, history of febrile seizures and TR at 6 months were significant. The model derived from intake variables only predicted TR5 <1 year correctly in 36% and TR5 >1 year in 85% (sensitivity 0.65, specificity 0.64). The corresponding values for the model derived from intake and 6-month variables were 43 and 88% (sensitivity 0.69, specificity 0.71). The course of the epilepsy was constantly favourable in 51%, steadily poor in 17%, improving in 25% and deteriorating in 6%. Intractability was in part only a temporary phenomenon. The outcome at 5 years in this cohort of children with newly diagnosed epilepsy was favourable in 76%; 64% were off medication at that time. Almost a third of the children had a fluctuating course; improvement was clearly more common than deterioration. After failure of the first AED, treatment can still be successful. Models predicting the outcome have fewer misclassifications when predicting a long terminal remission than when predicting continuing seizures.