Five neonates who were born at term and who had well-defined cystic lesions in the subependymal germinal matrix demonstrated by real-time cranial ultrasonography are reported. None had evidence of subependymal or intraventricular hemorrhage. Two of the neonates had congenital viral infections, one each with rubella virus and cytomegalovirus. Two of the other three neonates died, and pathologic examination of their brains confirmed the presence of the cysts and showed no evidence of prior subependymal hemorrhage. Cranial CT examinations of three patients failed to detect the subependymal cysts. Although central liquefaction in an area of prior hemorrhage is probably the most common cause of subependymal cyst formation in neonates, other conditions such as neurotropic infection should also be considered.