During a period of 30 months, 504 infants of 34 weeks gestation or less were enrolled in a prospective cranial ultrasound study. Ninety-two (18.4%) infants developed different degrees of periventricular leukomalacia (PVL), being transient periventricular echogenicities (PVE) in 75, localised cystic lesions in 7 and extensive cysts in 10. Eight of 75 (10.6%) infants with PVE, 4 of the 6 (66.6%) survivors with localised cysts and all 8 survivors with extensive cysts developed cerebral palsy in infancy and MRI studies could be performed in 15 of these 20 infants between 11 and 32 months of age. Neurological sequelae were most severe among the infants with extensive cysts and none were able to walk, while 6 of the 12 who developed cerebral palsy following either PVE or localised cysts had learned to walk independently. There appeared to be a good correlation between the degree of PVL, diagnosed using ultrasound, and the extent of MRI changes noted in infancy. Ventricular enlargement and delay in myelination were more common in infants with cystic lesions and periventricular hyperintensity (PVHI) was present in all infants, but most extensive in the cases with extensive cysts. MRI performed later in infancy may, even in the absence of neonatal cranial ultrasound, provide information about both the presence as well as the degree of leukomalacia, which the child may have suffered in the neonatal or antenatal period.