A total of 53 babies, 37 to 44 weeks' gestational age with a history of fetal distress in labour, and severe neurological abnormalities in the early newborn period, were followed up for between 2 and 5 years. Their progress was compared with an equal number of normal babies matched for gestational age, birthweight, sex, and social class, but without a history of fetal distress or delay in establishing spontaneous respiration at birth. In the set of babies with a history of fetal distress no perinatal condition was identified that could predict with certainty the type of neurological status in the newborn period, or the occurrence of neurological abnormality in later childhood. Follow-up disclosed a considerable improvement in function in most of the apparently brain-injured babies. It is suggested that such babies exhibiting apathy initially but subsequently hyperexcitability and extensor hypertonia carry the worst prognosis.