Twenty-three low-birthweight infants (17 males, six females) diagnosed with cystic periventricular leukomalacia (PVL; median gestational age 30 wks, postmenstrual age range 25 to 36 wks; median birthweight 1365 g, range 680 to 2010 g) were evaluated and compared with 209 comparison infants (117 males, 92 females; median gestational age 33 wks, postmenstrual age range 25 to 39 wks; birthweight 1771 g, range 670 to 2460 g). There were three assessment times: 36 to 38 weeks (preterm), 40 to 42 weeks (term), and 44 to 46 weeks (post-term); the Neonatal Behavioral Assessment Scale (NBAS) was used for assessment. Outcome at 2 years was assessed on the basis of a neurological examination, magnetic resonance imaging, computerized tomography, electroencephalography, and the Mental and Psychomotor Development Indices of the Bayley Scales of Infant Development. All infants in the PVL group were found to have evidence of cerebral palsy, whereas all infants in the comparison group were normally developing. Infants with PVL performed more poorly on all elements of the NBAS examination at all three assessment times compared with the comparison group. They demonstrated poorer motor control, less responsiveness to environmental stimuli, less regulatory capacity, and more abnormal reflexes compared with the comparison group. These results suggest that LBW infants with PVL show dysfunction and/or disorganization in their neurobehavioural systems in the neonatal period. Assessment of neonatal neurobehavioural characteristics using the NBAS may assist clinicians in identifying LBW infants with PVL, and in formulating plans for the developmental care of these infants.