To determine the risk of cerebral palsy and other forms of neurosensory impairment in very low-birthweight infants (less than 1500g) with severe lung disease, as compared with those with lesser degrees of lung disease, and to examine perinatal and demographic correlates of chronic lung disease, the authors prospectively followed 249 survivors born between 1983 and 1984. 52 (21 per cent) developed chronic lung disease (CLD), defined as oxygen dependence greater than or equal to 28 days. 15 per cent of children with CLD developed cerebral palsy, compared with 3 per cent who required oxygen for between three and 27 days and 4 per cent of those requiring oxygen for two days or less. The overall neurological impairment rate, including cerebral palsy, abnormalities of muscle tone, hydrocephalus requiring a shunt, and severe visual or hearing impairment, was 29 per cent for infants with CLD. This compares with rates of 9 per cent for those requiring oxygen for between three and 27 days and 6 per cent for those on oxygen for two or less days. Infants with CLD had a significantly lower mean birthweight and gestational age; 43 per cent had grade III or IV intraventricular hemorrhages; and they also required longer periods in hospital.