Gradient echo T2*-W sequences are more sensitive than T2-W spin-echo sequences for detecting hemorrhages in the brain. The aim of this study is to correlate presence of hemosiderin deposits in the brain of very preterm infants (gestational age <32weeks) detected by T2*-W gradient echo MRI to white matter injury and neurodevelopmental outcome at 2years. In 101 preterm infants, presence and location of hemosiderin were assessed on T2*-W gradient echo MRI performed around term-equivalent age (range: 40-60weeks). White matter injury was defined as the presence of >6 non-hemorrhagic punctate white matter lesions (PWML), cysts and/or ventricular dilatation. Six infants with post-hemorrhagic ventricular dilatation detected by US in the neonatal period were excluded. Infants were seen for follow-up at 2years. Univariate and regression analysis assessed the relation between presence and location of hemosiderin, white matter injury and neurodevelopmental outcome. In 38/95 (40%) of the infants, hemosiderin was detected. Twenty percent (19/95) of the infants were lost to follow-up. There was a correlation between hemosiderin in the ventricular wall with >6 PWML (P < 0.001) and cysts (P < 0.001) at term-equivalent age, and with a lower psychomotor development index (PDI) (P=0.02) at 2years. After correcting for known confounders (gestational age, gender, intrauterine growth retardation and white matter injury), the correlation with PDI was no longer significant. The clinical importance of detecting small hemosiderin deposits is limited as there is no independent association with neurodevelopmental outcome.