AIMS To compare the ultrasound (US) evolution and neurodevelopmental outcome of infants with localised (grade II) and extensive (grade III) cystic periventricular leucomalacia (c-PVL). METHODS Over a nine year period, c-PVL was diagnosed in 96/3451 (2.8%) infants in two hospital cohorts. Eighteen were excluded from the study. Thirty nine infants with grade II PVL were compared with 39 infants with grade III PVL. RESULTS The two populations were comparable for gestational age and birth weight. In infants with grade II PVL, cysts were noted to develop more often after the first month of life (53%) in contrast with grade III PVL (22%) (odds ratio (OR) 3.81 (95% confidence interval (CI) 1.19 to 12.63)). Cysts were also more often unilateral in grade II (54%) than in grade III PVL (0%) (OR indefinite; RR 3.17 (95% CI 2.16 to 4.64)). At 40 weeks postmenstrual age (PMA), cysts were no longer seen on US in 13/38 infants with grade II PVL, with ventriculomegaly being the only visible sequel in nine cases. In grade III PVL, cysts were still present in 25 of the 27 surviving infants. Nine infants with grade II PVL were free of motor sequelae at follow up compared with one infant with grade III PVL (OR 8.07 (95% CI 0.92 to 181.66)). Twenty two out of 29 children with grade II PVL who developed cerebral palsy achieved independent walking compared with 3/26 with grade III PVL (OR 75 (95% CI 11.4 to 662)). CONCLUSIONS In the cohort studied, 50% of the infants with c-PVL had a more localised form (grade II). In grade II PVL, the cysts developed beyond the first month of life in more than half of the cases and were often no longer visible, on US, at 40 weeks PMA. In order not to miss this diagnosis, sequential US should also be performed beyond the first month of life. Mild ventriculomegaly noted at term can sometimes be due to grade II c-PVL. Cerebral palsy was slightly less common and tended to be less severe in infants with grade II PVL than in those with grade III PVL.