In this prospective study routine ultrasound scanning of the brain was performed in all 353 infants of less than 32 weeks of gestation who had been admitted to our neonatal intensive care unit from 1987-1990. Ten infants (2.8%) showed transient periventricular echodensities (TPE) without the subsequent development of cysts and/or ventricular dilation. Nineteen infants (5.4%) developed periventricular leukomalacia (PVL). At the corrected age of 2 years the neurodevelopmental outcome was assessed. Five children with PVL had died before the age of 2 years. The neurodevelopmental outcome of children with TPE and PVL was compared with the outcome of 21 preterm children matched for gestational age, birth weight and severity of illness, and without ultrasound abnormalities of the brain in the neonatal period, who had also been admitted to our neonatal intensive care unit during the study period. Children with TPE and PVL appeared to have more handicaps than the control children. The children with TPE had significantly more minor motor handicaps than the control children, while the children with PVL had more major handicaps of all origins. Although infants with TPE had a more favorable prognosis than infants with PVL they should not be disregarded because TPE appear to be of clinical importance.