The authors studied the relationship between periventricular-intraventricular haemorrhage in infants of < 32 weeks gestation who had undergone routine cranial ultrasound scanning in the neonatal period, and neurodevelopmental outcome at the age of five years. Of 484 infants enrolled into the study, all 304 survivors were available for follow-up at the age of five years. 85 children had a disability; in 50 of these, the disability caused a handicap. Three children with dilated lateral ventricles and no periventricular-intraventricular haemorrhage were excluded from further analyses. 26 per cent of the infants with severe (grades III/IV) haemorrhage and 67 per cent of the infants with mild (grades I/II) haemorrhage survived the neonatal period. Children with mild haemorrhage had a significantly increased risk of disability (including handicap) at the age of five years.