Evoked potentials are sensitive prognostic tools in young infants at risk for developmental disability. The objective of this prospective study was to determine whether infants with congenital heart defects demonstrate evoked potential abnormalities prior to or following open heart surgery, and to examine the association between these abnormalities and developmental status 1 year following surgery. A consecutive series of newborns (less than 1 month old) and infants (1 month to 2 years old) were recruited. Somatosensory and brain stem auditory evoked potentials were carried out before or after cardiac surgery, or both. One year later, neurologic examination and standardized measures of motor performance and functional independence were carried out. Twenty-seven newborns and 31 infants underwent perioperative somatosensory evoked potential recordings. Results indicate that perioperative somatosensory evoked potential abnormalities were common in newborns (41%) but not in infants (13%) with congenital heart defects. Brainstem conduction times were within normal limits in all subjects; however, 32% presented with mild elevations in hearing thresholds. All newborns with abnormal somatosensory evoked potentials had abnormal neurologic examinations both perioperatively and again 1 year after open heart surgery. Moreover, standardized developmental assessments 1 year following surgery indicate that all newborns with somatosensory evoked potential abnormalities had developmental deficits in one or more domains. Somatosensory evoked potential abnormalities in the perioperative period are common in newborns with congenital heart defects, and are strongly predictive of persistent developmental delay later.