During 1979 and 1980, 351 infants weighing 500 to 999 gm were born in the State of Victoria, Australia; 89 (25.4%) survived to 2 years of age. Survival was better for tertiary center births (29%) than for those born elsewhere (17%). Multidisciplinary teams reviewed 83 of the survivors at 2 years of age postterm; some data were available for the other six children. Overall, 22.5% of infants had severe functional handicap, 29.2% had either moderate or mild handicap, and 48.3% had no handicap. Severe functional handicap was present in 50% of outborn infants; this was significantly more common than in those born in tertiary centers (15.5%), and the Bayley Mental Developmental Index was also significantly lower in outborn infants. The prevalence of cerebral palsy (13.5%), bilateral blindness (3.4%), and severe sensorineural deafness (3.4%) did not differ significantly in the inborn and outborn infants. Singleton inborn infants of appropriate weight for gestational age had significantly less severe functional handicap (9.1%), compared with 37.5% for the group of infants who were either small for gestational age or one of multiple births. Six of the 18 outborn infants could have been transferred in utero, and improvements in immediate neonatal care were possible in seven other infants.