We investigated the contribution of brain growth failure to outcome in infants of very low birth weight (VLBW; less than 1.5 kg) who were appropriate for gestational age (AGA; n = 379) or small for gestational age (SGA; n = 102). Growth was assessed at birth, term, and 8 and 20 months' corrected age and results of a Bayley Mental Developmental Index (MDI) and neurologic examination were evaluated at 20 months of age. Both groups had similar 20-month MDI scores (93 vs 90) and similar rates of neurologic impairment (14% vs 10%). More SGA infants (25%) than AGA infants (14%) had a subnormal head circumference at 8 months' corrected age, indicating failure to catch up in head growth. Subnormal head size at 8 months predicted the 20-month MDI score for both groups. However, multivariate analysis indicated that, whereas subnormal 8-month head size was directly associated with the MDI score in AGA children, in SGA children 8-month head size was not significantly related to the MDI score when neonatal illness, neurologic impairment, socioeconomic status, and race were controlled for. We conclude that in AGA VLBW infants, subnormal head size at 8 months results from major neonatal illness and has adverse later effects. In SGA infants, subnormal head size at 8 months has many causes, including growth retardation in utero, which may not have an adverse effect on outcome; if subnormal head size is superimposed with neonatal illness, a poorer outcome is likely.