Since the advent of modern methods of neonatal care, intracranial hemorrhage in premature infants, which is usually intraventricular, is probably not as uniformly fatal as generally admitted and the survivors are likely to develop post-hemorrhagic hydrocephalus. This paper is a retrospective study of 11 premature babies born between 1968 and 1972 and diagnosed as having hydrocephalus secondary to neonatal intracranial hemorrhage. Nine of these are still alive and two have died, one at 3 and one at 17 months of age. Eight underwent permanant surgical drainage of hydrocephalus. The perinatal history, laboratory data, clinical evolution, and neurological outcome were studied. Two groups of infants were identified; those with signs of acute neurological deterioration in the neonatal period who had the most severe neurological sequellae (in four cases, periventricular lesions in addition to hydrocephalus were seen on the air study and in one case confirmed at autopsy) and those showing no obvious neurological signs in the neonatal period. Of this latter group, two appear to be developing normally. The therapeutic implications of the findings are discussed.