We hypothesized that somatosensory evoked potentials (SEPs) recorded early in the course of a preterm infant life would be predictive of long-term neurodevelopmental outcome. We recorded unilateral, median nerve SEPs in 88 preterm infants twice in the first 3 weeks of life (SEP1 and SEP2). We found both SEP1 and SEP2 to be significantly associated with the presence of periventricular leukomalacia on head ultrasound (p = 0.04 and p = 0.02 for SEP1 and SEP2, respectively). Both SEP1 and SEP2 were predictive of later cerebral palsy (CP) (p = 0.03 and p = 0.003, respectively). False-positive results were frequent (13 of 17 for SEP1 and 20 of 28 for SEP2). A normal SEP, even when there was periventricular echogenicity on head ultrasound, was associated with a normal outcome in all but 1 instance. SEP1 and SEP2 were less accurate than head ultrasound findings of periventricular leukomalacia in the prediction of later CP (73, 69 and 93%, respectively). SEPs done in the first 3 weeks of life may provide additional prognostic information, particularly when the test is normal. Abnormal SEPs in this period must be interpreted cautiously.