The internal capsule is highly visible on conventional magnetic resonance imaging (MRI). It is myelinating rapidly at term, and the time course of its maturation is well known. It carries the major motor and sensory pathways to and from the cortex and the spinal cord. Additionally, fibres from the thalamus pass through it connecting to most regions of the cortex. It is therefore of vital importance, and damage to it has severe consequences. Its abnormal appearance on conventional MRI is a good predictor of an abnormal motor outcome in different clinical situations encountered in perinatal medicine. Its normal appearance on conventional MR images at term age is usually associated with a relatively normal motor outcome. More recently, diffusion-weighted and diffusion tensor imaging have allowed a much more sophisticated assessment of its maturation and connectivity; this has already led to a better understanding of how its development is affected by preterm birth and by hypoxic-ischaemic brain injury. Future studies will assess the relevance of these findings not only for motor outcome but also for cognitive, visual and sensory abilities.