Although intrapartum asphyxia is established as an important cause of perinatal loss, there is little consensus as to how much of the burden of neurologic handicap in the community is attributable to intrapartum and neonatal asphyxia, as measured clinically. A review of the available epidemiologic information suggests that the role of perinatal events in the genesis of severe mental retardation and cerebral palsy is not as large as popularly thought. Of all neurologic handicaps, cerebral palsy bears the closest relationship to adverse perinatal events, but at least 50% of all cases have no documented depression at the time of birth. No more than 15% of severe mental retardation can be attributed to perinatal events. Severe mental retardation without cerebral palsy does not appear to be attributable to birth asphyxia. The majority of even quite severely asphyxiated babies suffer no detectable neurologic or intellectual sequelae. These epidemiologic observations suggest that resuscitative efforts in mature newborn infants ought not to be too quickly abandoned for fear of late sequelae. At the same time, obstetric intervention based solely on concern for later neurologic development cannot be justified. The most appropriate justification for antenatal and intrapartum monitoring of fetal condition are the established associations of indicators of fetal asphyxia with fetal and neonatal death, and with morbidity in the neonatal period.