Ninety-five infants of 37 weeks' gestation or greater with evidence of hypoxic-ischemic encephalopathy following perinatal asphyxia were prospectively identified in the neonatal period. The degree of encephalopathy was graded the staging system of Sarnat and Sarnat. Six infants died, 78 infants were sequentially followed in the Neonatal Follow-up Clinic, and in five additional infants, follow-up information was available. The mean duration of follow-up was 19.3 months. Fifty-eight (65%) of the 89 infants followed were normal or mildly handicapped, six (7%) died, and the remainder had significant handicap. There was no significant relationship between any of over 100 obstetrical antepartum or intrapartum variables and outcome. Infants with five-minute Apgar scores of 0 to 3, seizures within the first day of life, Stage II or III encephalopathy, or a suppressed electroencephalogram had a significantly greater incidence of severe handicap or death. In addition, although there were fewer females, they had a significantly greater incidence of handicap. There appeared to be an improved outcome in the last two years (1977-1978) compared to the first two years (1975-1976), suggesting that improved recognition and neonatal management may lead to a decrease in significant sequelae.