A prospective study of 54 infants with birth weights of 1,000 gm or less was conducted over a period of two years. Of the 26 infants who survived, 24 weighed between 750 and 1,000 gm; two infants died after discharge and one was lost to follow-up, leaving 23 in whom serial observations were made over 18 months to 3 years of age. The incidence of neurologic deficit in these infants was 17% and of intellectual deficit, 13%. Of the four who were abnormal neurologically, two had spastic quadriparesis, one static encephalopathy, and one hydrocephalus secondary to intraventricular hemorrhage. The three with intellectual deficit had a developmental quotient less than 85. Of the perinatal factors examined, only birth asphyxia correlated significantly with both neonatal mortality and subsequent morbidity. Six (26%) of the surviving infants had mild, nonblinding retrolental fibroplasia; only one of them had a significant refractive error that required corrective lenses for vision. Sepsis was a significant contributor to neonatal mortality in ten of 28 infants who died, but was detected in only one survivor. Although the prognosis for the infant weighing 1,000 gm or less at delivery has improved significantly, there is promise for still further improvement by reducing perinatal asphyxia.