The results of cranial ultrasonography in 32 term infants who had hypoxic-ischemic encephalopathy (HIE) and in 26 control infants were reviewed. Small or nonvisualized ventricles were present in 94% of the patients with HIE and in 62% of the control subjects. In 20 of the 32 patients (63%) with HIE, ultrasound demonstrated parenchymal abnormalities; the most common finding was periventricular hyperechogenicity (12/32 patients). There was a single false positive result in the control group. Fifty per cent of patients with HIE who had abnormalities demonstrated on ultrasonograms died (within 15 days of birth), whereas none of the infants who had normal ultrasound findings died. Moreover, 80% of surviving patients who had abnormal ultrasound findings had residual neurological deficits versus only 11% of those with normal ultrasound findings. Our results indicate that ultrasound is effective in detecting parenchymal changes in patients with HIE, parenchymal echoes are a more reliable sign of HIE than ventricular size, and the finding of parenchymal lesions on ultrasound scans appears to be predictive of abnormal motor development.