Twelve children who have had chronic renal failure since infancy and underwent early dialysis (mean age 18 months) and early transplantation (mean age 28 months) were studied. Although head circumference in all was within the normal range at birth, by 1 year it was greater than 2 SD below the mean in nine, including six in whom it was greater than 3 SD below the mean. Developmentally, eight children were functioning in the subnormal range; four of these were moderately and one severely mentally retarded. It was not possible to determine whether the unfavorable neurologic-developmental outcome was the result of the toxic effects of uremia, malnutrition, or the associated psychosocial and experiential deprivation related to chronic, severe illness. Even minor insults at this vulnerable stage of brain development may produce permanent damage, and institution of therapy as early as possible may be crucial in obtaining a more favorable outcome.