To determine the effect of intrauterine growth retardation on the outcome of the premature infant, we compared a group of 35 premature, small-for-gestational-age (SGA) infants with two groups of premature, appropriate-for-gestational-age (AGA) infants: one with similar birth weight (AGA-BW group) and the other with similar gestational age (AGA-GA group). Groups were matched by year of birth, race, gender, and socioeconomic status. Infants were free of major congenital anomalies and intrauterine infection. They were evaluated at term, at 20 and 40 weeks, and at 1 year corrected age. The SGA infants had a lower mean developmental quotient than the two groups of AGA infants. The SGA infants had significantly smaller body dimensions at birth, more nursery complications, and a higher incidence of major neurologic problems than their AGA-GA matches but were comparable to the AGA-BW matches. Poor growth constitutes an additional risk factor to prematurity. The results highlight the importance of comparing premature SGA infants with premature AGA infants of similar gestational age rather than similar birth weight.