Scalp-recorded somatosensory evoked potentials (SEPs) have been successfully used in neonatal assessment for several decades. The current routine SEP paradigm is markedly predictive for future cerebral palsy (CP) or other neurocognitive sequelae in brain-injured babies. Recent advances in basic science have dramatically increased our knowledge about structural-functional development of SEP-related brain mechanisms. It has thereby become apparent that preterm SEP differs from that in more mature counterparts in that it also comprises responses from transient brain structures, and hence being unique to the preterm period. It is now obvious also that several aspects in the current SEP paradigm, ranging from the type of stimulation to the methods of recording and analysis, are suboptimal for preterm babies. Recent progress in recording and analysis techniques have made it possible to combine SEP studies with EEG recordings, as well as to implement advanced analyses (e.g. time-frequency analysis) into routine practice. This review summarizes literature from relevant areas in basic science, and proposes a novel, integrated approach in neonatal SEP studies in order to significantly increase the fidelity of testing somatosensory system.