Perinatal asphyxia is an important determinant of infant neurological outcome. There are very few studies looking exclusively at postasphyxial encephalopathy in preterm neonates.We studied the neurologic and sonographic abnormalities in 40 preterm babies with severe birth asphyxia during their hospital stay and till 3 months corrected age.87.5 % of the asphyxiated preterm babies had neonatal neurologic abnormality, compared to only 17% of the control babies (p<0.0001). Generalised hypotonia and reduced activity were the commonest abnormalities (observed in 85% of asphyxiated babies) while depressed sensorium (60%) and seizures (35%) were seen in more severe cases. White matter disease (WMD-including periventricular flare, cerebral edema and periventricular leucomalacia) was significantly more frequent in the study cases (34.5% in study cases vs 7.5% in controls, p<0.0001) as was grade 3/4 intraventricular hemorrhage(IVH) (25% in study cases vs 2.5% in controls, p<0.0001). There was 11 fold higher mortality among the asphyxiated babies (23 deaths in study cases vs 2 in controls, p<0.0001).The survivors had a significantly higher incidence of both mild and severe neurological abnormalities at corrected age of 3 months among the asphyxiated babies. There was a good correlation between the severity of the neonatal encephalopathy as well as the sonographic findings and the outcome.