Neonatal neurological dysfunction was found in only a small part of 1192 infants enrolled in an epidemiologic survey on very preterm (less than 32 weeks) and very low birthweight (less than 1500 gram) infants. A routine neurological examination was performed in the neonatal period by the attending paediatrician throughout all levels of care. The incidence of obvious neurological dysfunction was 8.1% and incidence of suspect neurological dysfunction was 6.1%. Multivariate analysis showed that gestational age, birthweight, low Apgar score, IRDS and, most of all, ICH were significantly associated with neonatal neurological dysfunction (N.D.). The mortality rate was very high in obvious and suspect ND infants (81.1% and 35.6% respectively) compared to neurologically normal infants (17.8%). This phenomenon was also found regarding the handicap rate at two years of age. Only 6% (n = 6) of the 96 infants with obvious ND survived without handicap. Using routine physical examination, a quarter of the very preterm or VLBW infants with later neurological disturbances were identified. A more standardized neurological examination, incorporated in the routine examination of newborns in all levels of care, might improve early identification of infants at risk for handicaps.