To examine the relationship between severe acidosis at birth and evidence of subsequent neurologic dysfunction, a 4-year review was performed encompassing 15,528 neonates. One hundred forty-two (0.91%) of these neonates had an umbilical cord arterial pH less than or equal to 7.05 with a base deficit greater than or equal to mEq/L. Neurologic assessments found 101 of 110 term neonates (91.8%) and 17 of 32 preterm neonates (53.1%) with severe acidosis to be free of neurologic deficits at the time of hospital discharge. Follow-up developmental evaluation data were available for 7 of 9 term neonates and 8 of 15 preterm neonates with abnormal examinations. Although 5 term and 6 preterm infants demonstrated mild developmental delays or mild tone abnormalities in the first year of life, none exhibited a major motor or cognitive abnormality at 12 to 24 months of age. Consequently, acidosis in umbilical cord blood, even when severe, is a poor predictor of subsequent neurologic dysfunction.