Despite recent studies of the natural history of cavernous malformations, there remains significant uncertainty concerning hemorrhage rates and the importance of lesion location. Controversy arises over varying definitions of "hemorrhage." What is ultimately important to the patient is the occurrence of a neurological event, which may or may not be associated with radiologically documented hemorrhage, as well as the chance of recovery after such an event. The purpose of this study was to determine the rates of occurrence and sequelae of neurological events in 173 patients referred to our vascular malformation clinic with cavernous malformations. All patient data were entered into a database. The mean age at presentation for the 173 patients was 37.5 years. The lesion location was deep (brainstem, cerebellar nuclei, thalamus, or basal ganglia) in 64 patients (37%) and superficial in 109 (63%). Thirty-one patients (18%) had multiple lesions. Disease presentation was due to seizures in 62 patients (36%), hemorrhage in 44 (25%), focal neurological deficit without documented hemorrhage in 35 (20%), headache alone in 11 (6%), and incidental findings in 21 patients (12%). The results obtained in the 110 patients eligible for follow-up review were used to derive information on the rates of hemorrhage and neurological events. An interval event (neurological deterioration) required both symptoms and signs. The total mean follow-up period was 46 months, the majority (65%) of which was prospective. There were 18 interval events in 427 patient-years of follow-up review, for an overall annual event rate of 4.2%. Location was the most important factor for predicting interval event occurrence, with significantly higher rates for deeply located (10.6%/year) compared with superficially located lesions (0%/year) (p = 0.0001). Of patients suffering a neurological event, only 37% had complete resolution of their deficits. This largely prospective study indicates that deep cavernous malformations carry a worse prognosis than superficial lesions with respect to annual rates of neurological deterioration. The alarming rate of adverse clinical events occurring in patients with deep lesions is punctuated by the fact that less than one-half of them recover fully during long-term follow-up review.