Forty term infants with hypoxic-ischaemic encephalopathy were assessed during the neonatal period with cranial ultrasound and MRI, and the findings were compared with outcome at one year of age. 38 had abnormalities on ultrasound and all had changes on MRI. The incidence of changes in the basal banglia/thalami and periventricular white matter was much greater with MRI than with ultrasound. Changes in the basal ganglia and thalami on MRI were associated with a poor outcome if they had also been detected with ultrasound. However, MRI identified four small infarcts which were not detected by ultrasound. There was no consistent association between periventricular white matter change on MRI and outcome. Regular ultrasound scanning identified all infants with a poor outcome. A normal ultrasound or isolated findings of intraventricular haemorrhage, subarachnoid haemorrhage or transient flares were associated with a normal outcome in 13 of 14 infants.