The purpose of this study was to investigate the risk factors of development of cerebral palsy (CP) in preterm infants who had periventricular echogenic abnormalities with or without cyst formation. During a period of 66 months, 332 newborns of 34 weeks gestation or less born at our hospital received serial brain ultrasound scans. Sixty-six of the 332 infants, 36 males and 30 females, were detected increased periventricular echodensity (PVE) during admission period. Subsequently, serial brain ultrasound scans were done for the 66 preterm infants at our follow-up clinic. Their neurodevelopment outcomes were then followed up for 10-48 months. The degree of periventricular echodensity (PVE) was graded as mild; or moderate to severe, according to the extent of the echodensity. Periventricular echodensity with cyst formation was classified by the size of the cyst at its widest diameter as either large (3 mm or multiple) or small (< 3 mm) in the parasagittal image. Eighteen of 66 (27.3%) infants developed cerebral palsy (CP). Infants with PVE with large cystic formation were at significantly higher risk for development of cerebral palsy (P < 0.005). Nine of 16 (56.3%) patients in the CP group had a longer duration of PVE than the non-CP group (8 of 46 patients: 17.4%) (p < 0.005). It is concluded that large cystic periventricular echodensity and long duration of PVE are associated with later development of cerebral palsy.