We prospectively and longitudinally evaluated neurologic status, cognitive status, and visual-evoked responses in 63 premature infants with cerebral intraventricular hemorrhage, 27 premature infants without hemorrhage, and 22 full-term normal infants. We hypothesized that severe intraventricular hemorrhage (grades III and IV) is associated with impaired visual-motor function, in part because of compression-related injury of the periventricular white matter by ventricular dilation. Infants with grade III or IV hemorrhage had significantly more neurologic sequelae at term and at 3, 7, 12, and 24 months; lower Bayley mental and motor scores at 3, 7, and 12 months; more abnormality on Kohen-Raz subscales for eye-hand coordination, object manipulation, and object relations at 3, 7, and 12 months; and lower Mullen vision-receptive and vision-expressive coordination scores at 24 months. The 12-month visual-evoked response correlated with the 24-month vision-receptive and vision-expressive organization scores for infants with grade III or IV intraventricular hemorrhage (r = -0.49, p less than 0.01, and r = -0.40, p less than 0.05, respectively). The data confirm our hypotheses of increased cognitive and neurologic sequelae, and increased abnormality of visual-motor coordination, during the first 2 years of life in infants with severe (grade III or IV) intraventricular hemorrhage.