Intracranial hemorrhage (ICH) was detected in 38 preterm neonates, using cranial ultrasonic (US) scanning. Forty-three preterm neonates examined during the same period but who had no cranial US evidence of ICH were also identified. Neurodevelopmental follow-up was performed at a mean age of 22.3 months on these 81 children. As a group, children with ICH demonstrated developmental indexes in the normal range but about ten points lower than children without ICH. The outcome in survivors of grade III ICH was quite similar to the outcome in survivors of grades I and II ICH. Survivors of grade IV (intraparenchymal) hemorrhage had a worse outcome. Cerebral palsy was significantly more prevalent in children with ICH. Only two thirds of children without ICH had a completely normal outcome, reinforcing the concept that factors other than ICH alone contribute to neurodevelopmental morbidity in this population.