During 1979 and 1980, 351 infants of birth weight 500 to 999 g were born in the State of Victoria: 89 (25.4%) survived to the age of 2 years corrected for prematurity, and 83 were fully assessed by a multidisciplinary team; partial data were obtained on the remainder. At the age of 5 years, corrected for prematurity, 85/89 (96%) were evaluated by a multidisciplinary team, although not all children could be fully evaluated by the psychologists. Reports were available for another three children; one child was untraced. Of the survivors able to be classified at 5 years, 59/82 (72%) had no functional handicap. Functional handicaps was severe in 16 (19%), moderate in four (5%), and mild in three (4%). Functional handicaps were present in 50% (8/16) of outborn survivors compared with the 23% (15/66) for the inborn survivors (P = 0.02). Cerebral palsy was diagnosed in eight children at 5 years and in 12 children at 2 years. The diagnosis was stable for the children not ambulant at 2 years; five of seven 2-year-old children with mild cerebral palsy had "outgrown" the diagnosis by 5 years, but ataxic cerebral palsy was not identified in one child until 5 years. Six children were blind; four had severe sensorineural or mixed deafness, one more than at 2 years. Of 82 children assessed according to identical criteria for functional handicap at both 2 and 5 years, 52 (63%) remained in the same category at 5 years, three (4%) were judged to be more severely handicapped, and 27 (33%) were less severely handicapped. The 2-year evaluation of extremely low birth weight children often proved to be unduly pessimistic, for many showed improvement or recovery from functional handicaps and impairments by 5 years of age.