A prospective longitudinal study assessed the effects of intraventricular hemorrhage (IVH) and socioeconomic status on the perceptual, cognitive, and neurologic status of preterm infants at 5 years of age. The preterm group consisted of infants with no IVH, grade I to II IVH, and grade III to IV IVH; a control group of normal term infants was also studied. Outcome was evaluated at 3, 4, and 5 years of age. Twenty-four percent of infants with grade III to IV IVH had abnormal neurologic diagnoses at 5 years of age. Correlations of predictor variables including IVH status, latency of visual evoked response, days of hospitalization, and socioeconomic status with 5-year neurologic outcome indicated that IVH status and visual evoked response at 1, 2, and 3 years continued to have an effect on neurologic outcome, but socioeconomic status and days of hospitalization did not; socioeconomic status did have a significant effect on the McCarthy cognitive scores but not on the perceptual scores at 5 years. Multiple regression analyses revealed that duration of hospitalization (reflecting neonatal morbidity), visual evoked response, and socioeconomic status all have independent effects on the cognitive index, whereas only duration of hospitalization has an independent effect on the perceptual index. These data support the concept that a complex interaction of biologic and environmental risk factors determines the degree of recovery from IVH by high-risk preterm infants.