The value of the electroencephalogram in predicting outcome and epilepsy was examined in neonates who had experienced EEG-confirmed neonatal seizures. Electroencephalogram, neuroimaging studies, and other clinical variables were systematically analyzed in 81 consecutive neonates with EEG-confirmed seizures. The surviving subjects were followed for a mean of 17 months to determine if they developed post-neonatal seizures (PNS) and abnormal neurodevelopmental outcome. Several EEG variables were correlated with neurodevelopmental outcome and PNS when analyzed with univariate and multivariate statistical analyses. The EEG background activity and the presence of status epilepticus were strong predictors of outcome, but were not associated with PNS. The presence of rhythmic theta-alpha bursts was highly favorable for both outcome and PNS. In the interictal EEG, the number of negative sharp waves in the temporal region correlated with outcome and PNS. Clinical variables associated with unfavorable outcomes included an abnormal neonatal neurologic exam and certain seizure etiologies (e.g. cerebral dysgenesis and infections). Global abnormalities on neuroimaging studies were invariably associated with an unfavorable outcome and with the development of PNS in 66% of cases. Using multivariate analysis, prediction of outcome (favorable versus unfavorable) was accurately achieved in 85% of cases when combining EEG variables with neuroimaging and clinical findings. In conclusion, in neonates with EEG-confirmed seizures, the EEG is a useful predictor of outcome, but is a less useful predictor of PNS.