Cysts in the periventricular region of the brain were demonstrated by ultrasound in eight of 102 preterm infants (birthweight less than 1501g or less than 34 weeks gestation) during a 14-month period. All eight babies survived, but developed serious neurological problems: five had spastic quadriplegia and three had spastic diplegia. Six had impaired vision and six had delayed speech development, but there was no evidence of impaired hearing. The cysts probably represent the infarcted lesions of periventricular leukomalacia.